Japan's Mazda Builds New Engine Factory in Russia's Far East

The Japanese car manufacturer is to start making engines for export in Russia's Primorsky Krai.

Japanese car manufacturer Mazda has agreed a contract to produce engines for its cars in Russia's Far East, Russian newspaper Kommersant reported on Friday.

As a result of the seven-year deal, Mazda has agreed to produce its Mazda SkyActiv-G engine for export in Russia's Primorsky Krai, and also begin the manufacture of the newest Mazda 6 and Mazda CX-5 models.

Two billion rubles ($31 million) will be invested in the project, which will produce up to 50,000 engines per year and create 600 jobs in the region. 

The Special Investment Contract (SPIK) with Mazda also obliges the Russian government to guarantee business conditions for the project. It was announced by Mazda Senior Managing Executive Officer Yuji Nakamine and Russian Trade Minister Denis Manturov at the Eastern Economic Forum in Vladivostok last week.

Manturov also visited the factory owned by the Mazda-Sollers joint venture in Vladivostok, where the 100,000th car recently left the conveyor belt.

"The 100,000th vehicle is an indicator of the sustainability of the enterprise and strict consistency in the implementation of industrial policy," Manturov said.

Production began at the factory in October 2012, and it adopted the Euro 5 exhaust emission standard for its vehicles late last year. The factory currently produces the Mazda CX-5 crossover SUV.

The minister said that the deal with Mazda is a good example for the rest of Russia's Far East, which the government is keen to develop. The Far East Development Fund was set up in 2011 to provide funding and administrative support for development projects.

"We see a great example of how Russian companies can be competitive in the production of motor vehicles and key components for international markets," Manturov said.