Volkswagen Nearing Launch of Audi Assembly in Russia

VIENNA – Volkswagen’s Russia subsidiary is finishing preparations for volume assembly of several Audi models at its plant in Kaluga.

“We are almost ready, the equipment is installed and we will assemble the first cars in the coming weeks,” Marcus Osegowitsch, general director of Volkswagen Group Rus, tells WardsAuto.

Plans call for the assembly of Audi A5, A6 and A7 sedans, as well as Q5 and Q7 cross/utility vehicles, from semi-knocked-down kits.

The A6 and A8 models are expected to be destined mainly for government use. The Russian government has said it intends to buy only locally made cars for its needs.

“Therefore we will build especially the A6 and A8 in Kaluga,” Osegowitsch says.

Currently, BMW is the only German premium brand made in Russia, with models built from SKD kits by contract assembler Avtovor in Kaliningrad.

Assembly of all five Audi models will start step by step this year.

Volkswagen builds the VW Polo sedan and VW Tiguan as well as Skoda Fabia and Octavia models in Kaluga from completely knocked-down kits with increasing local content. It also assembles VW Touareg and Multivan models from SKD kits.

As a part of the agreement between VW and the Russian government within the framework of Russian auto-industry policy, also known as the New Decree 166, the German auto maker is allowed to assemble up to 17,500 vehicles from SKD kits a year without paying import duties for them.

That means VW will have to balance assembly figures among the five Audi models and the Touareg and Multivan.

“If there will be larger demand from the government, we will of course build more A6 and A8 cars. If the government’s demand will be lower, we will build other vehicles,” Osegowitsch says.

VW assembled Audi cars in Kaluga from SKD kits in 2009 and 2010.

Audi sold 33,512 vehicles in Russia last year, up 44.1 % from 2011. The brand delivered 4,525 units this year through February, up 20.5 % from like-2012.