Volkswagen begins constructing first Russian plant

MOSCOW (AFP) – Volkswagen became the latest foreign car maker to establish a foothold in Russia, as the German company laid the foundation stone for its first factory in Kaluga, 160 km (100 miles) southwest of Moscow.

“When an internationally known group comes to Russia and to Kaluga, it’s already an event,” Russian Economic Development Minister German Gref said during a signing ceremony for the 400-million dollar (314 million-euro) project.

“But we are delighted more than anything with the production of 115,000 cars a year that Russian citizens will buy, because that will increase their well being,” Gref added in comments cited by Russia’s ITAR-TASS news agency.

Volkswagen’s factory — which will produce both Volkswagens and Skodas, its other brand — is expected to be completed in 2007 and will create 3,500 jobs.

AFP