VW Launches Engine Plant in Russia

Volkswagen AG has launched production at its new €250 million engine plant in Kaluga, Russia. The facility, which can make 150,000 powerplants per year, will supply VW's local assembly of Skoda and VW models.

Like Ford Motor Co., which also opened an engine plant in Russia this week, VW says the capacity is justified by the long-term growth potential for the country's car market. VW's group sales in the country are down 40% in a market that has shrunk 35% so far this year, according to the Moscow-based Assn. of European Businesses.