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Volkswagen seeks purchaser for Russian car production plant

28 July 2022 - 08:02 By Reuters
Volkswagen is looking to sell its car assembly plant in the Russian city of Kaluga.
Volkswagen is looking to sell its car assembly plant in the Russian city of Kaluga.
Image: Sean Gallup/Getty Images

Volkswagen is looking to sell its car assembly plant in the Russian city of Kaluga and a Kazakh automaker could be a potential purchaser, Russia's Vedemosti newspaper reported on Wednesday.

Vedemosti, citing an unnamed source familiar with the company's intentions, said Volkswagen would finalise its plans for the facility by the end of the year.

In an emailed response, Volkswagen spokesperson Nicolai Laude said: “We are constantly monitoring current developments and are considering various future scenarios. However, no decision has been made.”

Volkswagen announced in March that production at its Kaluga and Nizhny Novgorod sites would be suspended until further notice because of Western sanctions imposed after Russia's invasion of Ukraine, and vehicle exports to Russia would be stopped with immediate effect.

Vedemosti cited its source as saying the Kaluga plant could be bought by Kazakhstan's Asia Auto, which is based in the eastern city of Oskemen. It has a licence to produce both Volkswagen and Skoda cars, the paper said.

Volkswagen employs about 4,200 workers at the Kaluga plant, which it owns directly. It also has a contractual deal to assemble several of its models at the Nizhny Novgorod facility, owned by GAZ Group.

In early July, a Russian trade union said Volkswagen would close the Nizhny Novgorod plant and move equipment to Kaluga. At the time the company declined to comment on the claim.

New car sales in Russia fell 82% in June from a year earlier, reflecting sanctions hitting parts supply, spiralling prices hurting demand and an exodus of foreign automakers.

Russia's auto industry has almost ground to a halt since Moscow sent troops into Ukraine on February 24.


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