New Russian cars
October 21, 2009
Russian Prime Minister Vladimir was in good spirits at the opening ceremony, which was celebrated in grand style. The new Volkswagen plant, which already began operating in 2007 but only begins full production now, is welcome news for Russian car manufacturing.
The heavy impact of the global financial crisis has not spared Russia's car business. Only the day before the VW opening in Kaluga, Russia's biggest carmaker Avtovaz, of which French company Renault owns a 25-percent stake, announced it could not rule out filing for bankruptcy if it failed to restructure debts.
Planned in better times
The 500-million-euro Kaluga plant was planned three years ago in more economically stable times, when the Russian car market was on the verge of a spectacular expansion. In 2009 that market shrank by half and many experts expect Russia to take longer to recover from the economic crisis than western countries.
Volkswagen head Martin Winterkorn remained optimistic despite these gloomy prospects. "Russia remains on track to become one of the leading markets in the world for the car industry," he told reporters, "By 2018 we expect Russia to be among the top five nations with the strongest growth rates in the world."
The Kaluga plant is important for Volkswagen because imported cars are heavily taxed in Russia. Volkswagen hopes to produce five different models, including the VW Tiguan and the Skoda Octavia, and around 150,000 cars annually at the new site. The factory is projected to provide 3,000 new jobs in the region.
Exclusive Russian model
Putin was also afforded a glance at the prototype of a secret new model that Volkswagen is aiming to introduce to the Russian market next year. "For now it's a big secret and I have promised to keep quiet. But I think it's a very promising concept," he said at the opening.
Putin also addressed the troubles of Volkswagen's direct competitor Opel, which was recently helped out of trouble by a German-government-backed takeover partly funded by Russian bank Sberbank. He hoped to assuage fears that either auto-giant would suffer as result.
"Mrs. Merkel often asked me about Volkswagen's Kaluga plant, and whether the Opel problem could have consequences for it," Putin said, "We are very aware of the possible consequences of our joint projects. Our aim in this cooperation is to protect jobs in Germany and the Czech Republic, create new jobs in Russia, and give Russian citizens access to the modern, affordable technology we see here today."
Andreas Illmer/bk
Editor: Michael Lawton