VW Boosts Investment in Russia Again

Volkswagen AG says it will spend €840 million from 2013 through 2015 to expand its production capacity in Russia.

The investment is in addition to the unspecified amount VW has already allocated to the Russia unit under the company's previously announced €16.6 billion global investment over the next three years.

The new funding will more than double VW's total investment in Russia. The company plans to use €250 million of the fresh capital to erect a new engine facility in Kaluga with annual capacity of 150,000 units. Some of the money will be spent on boosting capacity at VW's nearby assembly plant to 225,000 vehicles per year.

The company also intends to invest in unspecified expansion of its joint venture with Russian truckmaker OAO GAZ in Nizhniy Novgorod. The two companies agreed in mid-2011 to make 110,000 VW- and Skoda-brand cars in 2015.

VW promised to spend €200 million in Nizhniy Novgorod before the venture began assembling the company's Skoda Yeti small crossover vehicle from kits this year. The partners plan to start making the Skoda Octavia sedan there in mid-2013.