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Business news, 01.06.2006 12:29

GM and Volkswagen to build in Russia

volkswagen General Motors is to build a new factory in Russia, according to an announcement by the Russian economics ministry. Though no location has yet been confirmed, reports suggest that it will be just outside St Petersburg. The factory will make the Chevrolet Aveo and Lacetti, and will replace the closed GM-AvtoVaz joint venture facility at the former Lada plant in Togliatti.

Volkswagen, meanwhile, is expected to announce later this week that it is to build a factory in the central Kaluga region, to build the Skoda Octavia for the local market. Assembly of Volkswagen-brand models is expected at a later date. Other manufacturers with new factories in Russia include Toyota, which opened a facility near St Petersburg last year, Renault, which builds the Logan in Moscow, and Kia, making the Spectra in Izhevsk.

Further international car-building news this week includes reports that BMW is to open a second factory in China. This will be a joint venture with the Brilliance group, adjacent to the existing plant in Shenyang. Renault has finally signed a deal for production of the Logan in Iran, where it plans to make 250,000 cars a year from 2008, a decision delayed following the controversy about Iran's nuclear programme and disagreements over export percentages. General Motors is said to be considering production of new compact crossover models in Indonesia, and finally, Serbian manufacturer Zastava - the company which once made the Yugo - is to rebuild its own factory outside Belgrade. Zastava, currently making a version of the last-generation Fiat Punto, plans to build a rebadged version of the Fiat Stilo once that model is replaced at the end of this year.

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