VW Opens Russian Factory

Auto maker may find stiff competition already there
By Nick McMaster,  Newser Staff
Posted Nov 29, 2007 5:51 PM CST
VW Opens Russian Factory
Volkswagen is the latest addition to a dense and competitive automotive industry in Russia, many of them foreign companies.   (Getty Images)

Volkswagen is attempting to break in to the Russian auto market by opening a major factory in the town of Kaluga, 100 miles southwest of Moscow. They are not alone: Der Speigel reports that Volvo and Renault already produce cars there, and GM, Ford and BMW have all grabbed substantial pieces of the Russian auto market.

VW will be rolling out a line designed to compete with the Lada, Russia’s über-cheap, top-selling car. Western companies are betting on an expansion of the Russian consumer base—only 20% of the population owns cars, compared to 50% in Germany. There were 2.25 million cars sold there last year; that number is expected to hit 3 million by 2015. (Read more Volkswagen stories.)

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