Volkswagen and General Motors to setup new plants in Russia

The Russian government has signed on an agreement with Volkswagen for a car production plant. In addition, they are nearing another similar deal with the world’s largest maker of automobiles, General Motors.

Volkswagen and GM are planning to target the growing emerging middle class in this market, which is totally ignoring the local products.

Volkswagen would now be building 115,000-vehicle plant in the city of Kaluga, southwest of Moscow. This plant is expected to cost around a massive $510 million.

Volkswagen AG’s chairperson Bernd Pischetsrieder said on this deal: “The decision took a long time … this was not a fast path and our competitors have overtaken us to an extent we’ll have to be all the more active.”

General Motors itself is expected to build a car production facility. However, negotiations about this deal are still going on.

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