Volvo said a final contract for the project would be signed with authorities in Kaluga, about 200 km southwest of Moscow, in the near future. Investment in the facility is estimated at $138 million (SEK 935 million).
In 2003 Volvo built an assembly plant near Zelenograd, 37 km northwest of Moscow, however, the plant's annual output is limited to just 500 trucks, and is currently working at maximum capacity.
Earlier reports said Volvo Car Russia sold 3,320 vehicles in the first quarter of 2007, up 140% from the same period last year, and in the same period the Volvo XC90 was the best selling car in Russia.
Russia currently has eight projects manufacturing foreign cars using foreign capital. The Izh Avto plant, which belongs to the SOK machine-building holding company, manufactures compact cars for KIA, a Korean company. TagAZ assembles several models of Hyundai. The Avtotor assembly project in Kaliningrad cooperates with four foreign concerns: GM, BMW, Chery and KIA. Severstal Auto, a former subsidiary of the steel giant Severstal, produces a line of cars for Fiat and SUVs for Korea's SsangYong. Russia also has two joint ventures, GM-AvtoVAZ (Chevrolet) and Avtoframos (a project involving France's Renault and the Moscow city government to produce inexpensive Renault Logan cars). Ford, which was the first foreign car maker to manufacture vehicles in Russia, has a plant near St. Petersburg. GM is building a factory nearby.
Later this month Russia's economics ministry will hold final talks with six carmakers, including Japan's Mitsubishi and Suzuki, France's Peugeot-Citroen and China's Great Wall, which plan to start complete knock down (CKD) assembly of their cars in Russia. Peugeot-Citroen could build a car assembly plant in the Nizhny Novgorod Region in central Russia, and Suzuki will most likely build a plant in St. Petersburg.
