Dec 03 2007
VW Plant Opens in Russia
Germany’s Volkswagen opened a production plant in Kaluga, about 125 miles southwest of Moscow, signaling increased foreign confidence in Russia as an investment destination.
Reuters delivers the stats: Foreign direct investment surged 91.3 percent in the first nine months of this year to $19.6 billion and capital investment are up by 19.6 percent year-on-year in October, far above overall economic growth of 7.5 percent.
The auto market in Russia is expected to be Europe’s biggest by 2011, according to analysis by PriceWaterhouseCoopers.
“We are convinced that the Russian car market has huge potential and you can be sure that Volkswagen will make it a priority target,” VW Chief Executive Martin Winterkorn told Reuters. He expects 45 million Russian households to own a car by 2010.
Oskar Akhmedov, director of VW Group Russia, foresees dramatic growth in the Russian automobile market in coming years, according to a story in BusinessWeek: “The population is under-motorized,” he says. While Germany has 500 cars for every 1,000 people, Russia has only 190. Even in other former communist countries in Central Europe, the number is between 300 and 350. In Russia today there are 2.25 million vehicles sold annually. By 2015 that number will be 3 million. “Conservatively speaking,” Akhmedov adds.
[Image from TheLightIsGreen.com]
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