Volkswagen Builds Engine Plant in Russia

Aug. 28, 2012
Russia is the primary strategic growth market in Europe for the Volkswagen Group By 2018 the company intends to sell a half a million vehiclesin Russia annually Plant helps the company comply with law that of 2016, at least 30% of vehicles produced in Russia will be equipped with engines that were manufactured locally.

The Volkswagen Group (IW 1000/10) announced on Tuesday that it will construct an engine plant in Kaluga, Russia.

VW will invest 250 million euro (US$314 million) at the new location, where the modern engine generation EA211 will be produced locally as of 2015.

The capacity is set at 150,000 engines a year. The engine plant is being built directly next to the Volkswagen vehicle plant in Kaluga.

"Russia is the primary strategic growth market in Europe for the Volkswagen Group,” said  Dr. Martin Winterkorn, chairman of the Board of Management of Volkswagen Aktiengesellschaft.

“By 2018 we intend to sell a half a million vehicles here annually,” he added. “ To this end we will once again be investing approximately 1 billion euro in local production and new models."

The engine that will be produced in Kaluga in the future is a 1.6 liter petrol engine from the EA 211 series.

As of 2015, the engine plant will supply engines for the vehicle production of the Volkswagen Group Rus in Kaluga as well as the contract production in the GAZ plant in Nizhny Novgorod. Crankcases, cylinder heads with assembly integrated, crankshafts as well as the complete engine assembly are all part of the planned scope of production.

With the construction of the engine plant, Volkswagen is expanding its industrial commitment in Russia. At the same time, the Group is fulfilling the targets agreed with the Russian government at the end of May 2011 in the ancillary agreement to decree 166 which determines that, as of 2016, at least 30% of vehicles produced in Russia will be equipped with engines that were manufactured locally.

Investments by the Volkswagen Group in Russia up to now have totalled approximately one billion euro.

In order to respond to the strong increase in demand on the Russian automotive market in the future, VW is planning to invest a further one billion euro in Russia for the development of new market-driven products, the further localisation of production as well as the construction of the new engine plant in Kaluga as was agreed today.

About the Author

Adrienne Selko | Senior Editor

Focus: Workforce, Talent 

Follow Me on Twitter: @ASelkoIW

Bio: Adrienne Selko has written about many topics over the 17 years she has been with the publication and currently focuses on workforce development strategies. Previously Adrienne was in corporate communications at a medical manufacturing company as well as a large regional bank. She is the author of Do I Have to Wear Garlic Around My Neck? which made the Cleveland Plain Dealer's best sellers list. She is also a senior editor at Material Handling & Logistics and EHS Today

Editorial mission statement: Manufacturing is the enviable position of creating products, processes and policies that solve the world’s problems. When the industry stepped up to manufacture what was necessary to combat the pandemic, it revealed its true nature. My goal is to showcase the sector’s ability to address a broad range of workforce issues including technology, training, diversity & inclusion, with a goal of enticing future generations to join this amazing sector.

Why I find manufacturing interesting: On my first day working for a company that made medical equipment such as MRIs, I toured the plant floor. On every wall was a photo of a person, mostly children. I asked my supervisor why this was the case and he said that the work we do at this company has saved these people’s lives. “We never forget how important our work is and everyone’s contribution to that.” From that moment on I was hooked on manufacturing.

I have talked with many people in this field who have transformed their own career development to assist others. For example, companies are hiring those with disabilities, those previously incarcerated and other talent pools that have been underutilized. I have talked with leaders who have brought out the best in their workforce, as well as employees doing their best work while doing good for the world. 

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