As you know, the Russian government offered foreign automakers a deal: Invest heavily into the Russian auto industry, and Mother Russia will let you import parts and components at negligible or zero duty rates. Present your plans no later than July 1. Here is Volkswagen’s answer: Volkswagen and the GAZ Group today signed an agreement to assemble Volkswagen and Škoda models under contract at the GAZ plant in Nizhny Novgorod, some 260 miles east of Moscow. The planned production volume is 110,000 vehicles per year.
GAZ will build the Volkswagen Jetta, Škoda Octavia and Škoda Yeti models for the Russian market. The Škoda Yeti, is scheduled to start rolling off the production line by the end of 2012.
In its press release, Volkswagen is going to great pains to point out that “the collaboration with GAZ is based on an additional agreement to Decree 166 relating to customs duties benefits which was concluded with the Russian government at the end of May.”