German carmaker Volkswagen plans to boost production in Russia in the medium term, a spokesman for the company said, to tap into growth outside its home market and take advantage of incentives. Moscow expects foreign auto makers to invest $7 billion in Russia as a result of customs duty breaks granted to companies planning to make at least 300,000 cars there per year by 2015, up from 25,000.
"We have not yet made a decision on how to meet this demand," the spokesman told Reuters on Sunday. He was commenting after German weekly magazine Wirtschafts Woche earlier said that Volkswagen was considering raising production in Kaluga to 200,000 vehicles per year from 150,000 now or building a second plant with a capacity of 150,000 vehicles per year.
Volkswagen earlier this year struck a deal to produce more than 100,000 Volkswagen and Skoda cars a year at Russian group GAZ's plant as the German carmaker increases its presence in the fast-growing Russian market.