Volkswagen Opening New Plant In Russia

Production facility will employ 3,500 and will assemble Volkswagen and Skoda models.

FRANKFURT, Germany (AP) - Automaker Volkswagen AG said Wednesday it will employ 3,500 people at a planned plant in Russia and has set up a subsidiary in the country to oversee the project.

Volkswagen Rus was registered with Russian regulators and will oversee the development and operation of a new $465 million production facility in Kaluga, about 100 miles southwest of Moscow.

The facility, set to open in the second half of 2007, will assemble Volkswagen and Skoda models. Complete production, including assembly lines and a body and paint shop, are expected to be running by 2009.

Production will initially focus on the Skoda Octavia, but will expand to include VW brands Polo, Passat and Touareg.

Earlier this month, General Motors Corp. broke ground on its first fully owned Russian plant in St. Petersburg - the latest in a slew of foreign car factories springing up in Russia amid increasing demand for new cars in the country.

Three other foreign car companies launched plants in Russia last year: France's Renault SA, South Korea's Kia Motors Corp. and Japan's Toyota Motor Corp. Ford Motor Co. also has a factory near St. Petersburg.

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