German carmaker Volkswagen is planning to invest EUR250m to build a new 30,000m2 engine plant in Kaluga, Russia.
Volkswagen's new engine plant, which will be built next to the carmaker's vehicle plant in Kaluga, will manufacture the modern engine generation EA211 by 2015 and is expected to produce 150,000 engines per annum.
The new 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 by 2015.
Volkswagen Aktiengesellschaft Board of Management chairman Martin Winterkorn said the company intends to sell a half a million vehicles in Russia annually by 2018.
"To this end we will once again be investing approximately 1 billion euro in local production and new models," Winterkorn said.
"The engine that will be produced in Kaluga in the future is a 1.6 litre petrol engine from the EA 211 series and thus represents the most up to date engine technology in the Volkswagen Group."
The company said it is expanding its industrial commitment in Russia with the construction of the new engine plant in the country.
Volkswagen have already invested about EUR1bn in the Russian automotive market and is now planning to invest a further EUR1bn in the country by 2018.
