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Volkswagen seeks purchaser for Russian auto-making plant -newspaper

Randy Mancini 2 Jul 27

(Reuters) -Volkswagen is looking to sell its car assembly plant in the Russian city of Kaluga and a Kazakh auto maker could be a potential purchaser, Russia’s Vedemosti newspaper reported on Wednesday.

Vedemosti, citing an unnamed source familiar with the company’s intentions, said Volkswagen would finalize its plans for the facility by the end of the year.

In an emailed response, Volkswagen spokesman Nicolai Laude said: “We are constantly monitoring current developments and are considering various future scenarios. However, no decision has been made.”

Volkswagen announced in March that production at its Kaluga and Nizhny Novgorod sites would be suspended until further notice because of Western sanctions imposed following Russia’s invasion of Ukraine, and vehicle exports to Russia would be stopped with immediate effect.

Vedemosti cited its source as saying the Kaluga plant could be bought by Kazakhstan’s Asia Auto, which is based in the eastern city of Oskemen. It has a license to produce both Volkswagen and Skoda cars, the paper said.

Volkswagen employs around 4,200 workers at the Kaluga plant, which it owns directly. It also has a contractual deal to assemble several of its models at the Nizhny Novgorod facility, owned by GAZ Group.

In early July, a Russian trade union said Volkswagen would close the Nizhny Novgorod plant and move equipment to Kaluga. At the time the company declined to comment on the claim.

New car sales in Russia fell 82% in June from a year earlier, reflecting sanctions hitting parts supply, spiraling prices hurting demand and an exodus of foreign automakers.

Russia’s auto industry has almost ground to a halt since Moscow sent troops into Ukraine on Feb. 24.

(Reporting by David LjunggrenEditing by Bill Berkrot and Alistair Bell)