Russian carmaker Gaz, VW aim for assembly cooperation

Oct 20, 2010, 14:28 GMT

Moscow - German carmaker Volkswagen and Russian concern Gaz are discussing a possible deal for the joint assembly of VW cars at the Russian firm's plant in Nishny Novgorod, the German Press Agency dpa was told Wednesday.

'We are in close contact with the Russian government to find the best solution and to fulfill our strategic goals,' the Russian VW subsidiary, VW Group Rus, told dpa.

It divulged no further details, saying the talks were still in progress.

But Bo Andersson, head of Gaz, commented to the television broadcaster Russia Today that the talks were about to be wrapped up: 'I believe that we'll be able to report the completion within a month.'

VW Group Rus confirmed to the internet newspaper gazeta.ru that an outcome to the talks - 'either positive or negative' - could be expected by year's end.

In September, VW chief executive Martin Winterkorn had discussed a possible VW-Gaz cooperation in talks with Premier Vladimir Putin.

Financial Times Deutschland, without citing sources, said VW Group Rus was aiming for a production volume of up to 150,000 cars per year at Nishny Novgorod, located on the Volga River.

The reason behind VW's interest in production at the Gaz works is that production capacity at VW Group Rus's own plant at Kaluga, 200 kilometres outside Moscow, apparently is insufficient.

But VW does have plans to set up a second production line at Kaluga, with Winterkorn saying Volkswagen's aim is to be selling 360,000 cars per year in Russia by 2017-2018.

Besides VW, other foreign car concerns have shown interest in cooperating with Gaz, with media reports naming US car giant General Motors as one potential competitor.

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