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Volkswagen Group expands presence in Russia with agreements with GAZ

The Volkswagen Group and GAZ Group have extended their manufacturing agreement for Volkswagen and ŠKODA models in Russia until 2025. Furthermore, the Volkswagen brand will in future supply 2.0 TDI engines for GAZ light commercial vehicles, opening up new business opportunities in international markets.

Additionally, Volkswagen Truck & Bus signed a letter of intent with GAZ Group which will enable the companies to identify the possibilities for a long-term strategic partnership. The main focus will be on the delivery and joint assembly of components as well as joint product concepts.

Volkswagen Group Rus and GAZ Group are extending their joint project to produce Volkswagen and ŠKODA cars at Gorky Automobile Plant and are opening up new development opportunities for the brands’ model ranges. Marcus Osegowitsch, General Director of Volkswagen Group Rus, and Vadim Sorokin, GAZ Group president, signed the new agreement which extends the joint project until 2025, defines the model versions to be produced in Nizhny Novgorod, and sets out the plans to adapt GAZ production capacities for the launch of new models for Volkswagen Group Rus.

The cooperation between Volkswagen Group Rus and GAZ Group started in 2011 with the signing of an agreement for the contract assembly of Volkswagen and ŠKODA cars at the GAZ plant. Under the project, new assembly and body shops were built at GAZ, the paint shop was modernized, logistic and quality control systems were improved, and production of components for Volkswagen and ŠKODA vehicles was established.

GAZ personnel were trained at Volkswagen and ŠKODA plants in Germany and the Czech Republic, and a new training center was opened at GAZ. The total number of cars produced so far under the cooperation between Volkswagen Group Rus and GAZ Group totals some 200,000. This includes Volkswagen Jetta as well as ŠKODA Yeti and Octavia produced in Nizhny Novgorod.

Maximum annual production capacity at the Gorky Automobile Plant is around 132,000 vehicles. Total investment in equipment and infrastructure amounted to €300 million. Currently, around 3,000 employees assemble the Volkswagen and ŠKODA models at the GAZ plant in Nizhny Novgorod.

Supply of Volkswagen 2.0 TDI engines. There is to be an additional, second step in the cooperation between the parties with a view to developing the model range and growing product sales volumes. GAZ Group plans to equip GAZ vehicles with Volkswagen TDI 2.0 engines from the Salzgitter plant in Germany. The diesel engines, which fulfill all legal requirements and the applicable emissions standards, will be integrated in the new GAZelle NEXT family, which includes drop-side trucks, full-metal vans and minibuses. Volkswagen will provide technical support to integrate the engines in the GAZ model range.

Volkswagen Truck and Bus. The Volkswagen Truck & Bus Group with its brands MAN, Scania, and Volkswagen Caminhões e Ônibus as well as the GAZ Group, which is the largest manufacturer in Russia of light-, medium- and heavy-duty commercial vehicles, already have a long-standing partnership in the bus sector. Now, this relationship of trust is to be intensified. Volkswagen Truck & Bus has a comprehensive portfolio of technologies as well as an extensive international sales network. As the largest manufacturer of vans, trucks, buses, and passenger cars in its home market, the GAZ Group has an excellent local competence and infrastructure.

As a next step after the signing of the letter of intent, the companies will examine possible projects.

The GAZ Group’s cooperation with companies of the Volkswagen Truck & Bus Group started more than a decade ago.

MAN has delivered more than 5,500 engines for GAZ Group’s LIAZ city buses since 2007, operating in Moscow, St. Petersburg and other major cities in Russia as well as some export markets.

With Scania the cooperation started in 2005 and resulted in the creation of CRUISE tourist coaches and VOYAGE-series inter-city coaches for sale on Russian and export markets. 1,600 GAZ Group buses were built with Scania components.

In 2014, the GAZ Group and Scania delivered more than 700 buses and coaches for the Olympic Games in Sochi. Today the companies are engaged in joint development of a new modification of CRUISE bus with new interior design, improved customer features and Advanced Driver Assistance Systems (ADAS). The coach will be offered as the optimal solution for transportation of teams and fans in the cities of Russia, hosting 2018 FIFA World Football Cup.

In the first quarter of 2017, Volkswagen Truck & Bus sold 1,390 trucks in the Russian market doubling the previous year’s figure. After a successive market decline since 2012 and a moderate rebound in 2016, the Russian truck market saw a significant increase in demand in the first quarter of 2017 with strong overall growth of about 40%. The total truck market volume amounted to roughly 12,500 units.



Will the DP and Media people accuse VW of collusion with Russia?


Not likely Harvey.

Collusion: Secret cooperation for an illegal or dishonest purpose.

"The diesel engines, which fulfill all legal requirements and the applicable emissions standards,"

Russia supports the Paris agreement and follows European emissions standards Euro VI.
USA has similar standards though the future is in doubt with the push to abandon the currently legislated tightening of emissions standards roadmap.

The fact that the current U.S. administration behaves in a dishonest manner to allow vehicle manufactures to falsely claim the legislated standards are "impossible" could well meet the legal definition of collusion.

Ignorance is not an excuse.

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