Magna to Team with Avtotor on Russian Manufacturing

Canada's Magna International Inc. has signed a cooperation agreement with Russian carmaker ZAO Avtotor to create an auto assembly and parts complex in Kaliningrad, Russia.

The companies say the manufacturing cluster will include as many as six vehicle assembly operations for various automakers. They say annual capacity could reach 250,000 vehicles by 2018.

The complex also will include as many as 15 joint-venture parts facilities that will supply Avtotor and may produce components for export and other automakers in Russia.

The partners did not specify whether the car plants also would be part of a joint venture. Russian news reports say Avtotor will own 60% of the complex, and Magna will own the balance.

Avtotor Chairman Vladimir Scherbakov told reporters earlier this year the project would cost $3.2 billion.

Magna makes auto parts, and its Graz, Austria-based Magna Steyr unit assembles vehicles on a contract basis. Avtotor assembled 222,000 vehicles last year at four factories near Kaliningrad for BMW, Kia-Hyundai, General Motors and GM's Opel unit.