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Volkswagen Starts Vehicle Assembly In Russia



30th November, 2007

Friedrich-Wilhelm Lenz, Managing Director of Volkswagen Rus and speaker for the 
management, and Prof. Martin Winterkorn, Chairman of the Board of Management of 
Volkswagen Aktiengesellschaft.

The Deputy Prime Minister of the Russian Federation, Sergey Naryshkin, and the Chairman of the Board of Management of Volkswagen Aktiengesellschaft, Prof. Martin Winterkorn, were joined by the Chairman of the Board of Directors of Skoda Auto, Reinhard Jung, and Prof. Jochem Heizmann, Member of the Board of Management of Volkswagen Aktiengesellschaft with responsibility of 'Group Production', to inaugurate the new Volkswagen plant in Kaluga, Russia, on Wednesday.

"With the start of vehicle assembly at our new plant in Kaluga, the Volkswagen Group has definitively arrived in the emerging Russian market. Local production of Volkswagen and Skoda brand vehicles in the up-and-coming city of Kaluga now gives us the chance to increasingly profit from rapid growth on Russia's automotive market," Winterkorn commented in Kaluga. The foundation stone at the site located south west of Moscow was laid on 28th October, 2006 - exactly thirteen months prior to assembly start-up.

Volkswagen Passat and Skoda Octavia models, the first vehicles to be assembled in Russia, jointly left the assembly line during a ceremony attended by over 600 invited guests from business, industry and politics. It is planned to assemble some 66,000 units of the two brand models in 2008 under the now complete first development stage of the plant. In the second development stage from 2009, the plant with a maximum capacity of 150,000 vehicles will begin production at its own body shop, paint shop and final assembly line.

Reinhard Jung, Chairman of the Board of Directors of Skoda Auto, underlined the significance of the new plant in the "Grabzevo" techno-park: "For Volkswagen and Skoda, Russia is a strategic emerging market. The fact that Skoda has begun to produce the Octavia here is an important signal for the further development of our brand. We already manufacture at three plants in the Czech Republic, as well as in India, Ukraine, Bosnia, Kazakhstan and now Russia. Kaluga is thus our fifth foreign location. Skoda Auto is on the road worldwide."

Prof. Heizmann expressly thanked the Governor of Kaluga oblast, Anatoly Artamonov, and all involved in setting up operations in Russia: "I am delighted that we can start assembling vehicles in Russia today - exactly thirteen months since we laid the foundation stone. I would like to express my appreciation to all our Russian partners and, of course, to our staff who have produced an outstanding performance here in Kaluga. The first plant fitters will begin work in Kaluga during the next few months, and we will then start full production during the first half of 2009."

Volkswagen's total investment in Russia will exceed 500 million euros. In the final development stage, the new 400-hectare plant in Kaluga will have its own rail link to supply parts and components for production. Further land has been earmarked for suppliers to give them the opportunity to locate near the production facilities. By the time the plant has been completed, over 6 million cubic metres of earth will have been moved to level the site ready for development. Volkswagen in Kaluga will have a total workforce of some 3,000 by the end of 2009.

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