In its never-ending quest for global domination, the VW Group signed an agreement with the GAZ Group to assemble Volkswagen and Skoda models under contract at the Russian automaker’s in Nizhny Novgorod. The two companies had already concluded a memorandum of understanding (MOU) regarding joint automobile production in Russia in February 2011 with a planned production volume of 110,000 vehicles per year.
Under the deal, GAZ will build the Volkswagen Jetta compact sedan, Skoda Octavia and Skoda Yeti crossover models for the Russian market, with the first vehicles to start rolling off the production line by the end of 2012.
The German automaker will invest some €200 million (US$287 million) in the plant to expand and bring the existing paint shop and assembly facilities up to date as well as to set up a new body shop. Furthermore, VW and GAZ will implement a comprehensive training program for employees in Nizhny Novgorod.
“The Russian market is a growth engine for the automobile industry and an important pillar of our Strategy 2018,” Volkswagen CEO Martin Winterkorn said in a statement. “The quick expansion of production capacity in cooperation with GAZ will significantly strengthen the Volkswagen Group’s position on this key market,” he added.
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