Russia’s GAZ Launches Skoda Yeti CKD Assembly

VIENNA – Russian auto maker GAZ launches volume assembly of the Skoda Yeti compact cross/utility vehicle from complete-knocked-down kits at its plant in Nizhny Novgorod, Russia.

GAZ is acting as contract manufacturer for Volkswagen Group.

Since November 2011 GAZ has been assembling the Yeti from semi-knocked-down kits. Some 6,300 SKD Yetis were assembled through November 2012. Plans call for assembling about 13,000 units in 2013.

“In GAZ, we have a strong local partner at our side,” Michael Oeljeklaus, Skoda’s board member responsible for production and logistics, says in a statement. “GAZ is a company with about 80 years of experience in car making, with a profound knowledge of the Russian market and highly skilled staff.”

The Skoda Yeti is the first CKD model to be built for GAZ’s German partner. It will be followed by the new VW Jetta next spring and the next-generation Skoda Octavia in mid-2013.

While the Skoda CKD kits are shipped from Czech Republic to Russia, the Jetta sets will be sourced from Mexico.

GAZ also is preparing for CKD assembly of the Chevrolet Aveo for its second partner, General Motors. That contract anticipates assembly of up to 30,000 Aveos a year.

The agreement with VW runs until 2019. In that time period, the Skoda and VW production at GAZ may reach a capacity of 115,000 units a year.

VW and GM will use different welding shops within the Nizhny Novgorod plant, but they will share the paint and assembly shops. The welding shop for VW and Skoda cars is located in a building used for welding of bodies of Volga models over the past decades. GAZ refurbished the building and VW installed a new welding shop on the premises.

Much of the manufacturing space dedicated for VW and GM cars was used for the Volga Siber in past years. Production of the Siber, a Russian version of the old Chrysler Sebring, started in 2008. However, the project failed and Siber production was phased out in 2010.

Bodies for the Aveo will be welded in the former Siber welding shop.

All cars will be painted in a modernized Haden paint shop, which also was used for the Siber. Following the Siber phaseout, GAZ painted some of its Gazel light-commercial vehicles with difficult colors such as metallic in the paint shop.

“For final assembly, we will use the former Siber (line), which is relatively up to European standards, and assemble both Volkswagen and General Motors vehicles side by side,” GAZ President Bo Andersson told WardsAuto in an earlier interview.

According to Andersson, up to 5,000 people will work in VW and GM car assembly when the Nizhny Novgorod plant reaches capacity. The GAZ facility is VW Group’s second manufacturing site in Russia.

The German auto maker already operates its Volkswagen Group Rus plant in Kaluga, which produces the VW Polo sedan and Tiguan cross/utility vehicle as well as the Skoda Fabia and Octavia cars using CKD parts. The VW Touareg and Multivan vehicles also are built in small volumes from SKD kits.

“CKD production of the Yeti is another milestone for our growth in Russia,” Skoda Chairman Winfried Vahland says in a statement. “Russia is our third-strongest sales market worldwide and our No.2 in Europe, and we intend to grow further in years to come, which is why we are resolutely extending our model offensive in this country and expanding local capacity further.”

Russia is an important pillar for Skoda’s 2018 growth strategy. The VW subsidiary sold 89,072 cars in the country through November, up 36.6% from like-2011, positioning the brand as No.10 in the local market.

Skoda’s share of the Russian light-vehicle market, which includes cars and LCVs, is 3.3%. The auto maker aims to increase its share to 5% in the next few years.

Following the Yeti and the new Octavia, both sourced from GAZ, Skoda’s next model to be made in Russia is the Rapid, which will be assembled at the Volkswagen plant in Kaluga starting in early 2014.

“The Skoda Rapid is the perfect family car, and it is sure to become very popular precisely in Russia,” Vahland says.