Chinese automaker may take over VW plant in Russia – media

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The German company is in the final stages of selling its main car factory in the country, according to Kommersant

Chinese car manufacturer Chery could soon launch production at a former Volkswagen factory in Kaluga, to the southwest of Moscow, Kommersant reported on Thursday citing sources familiar with the matter. The newspaper also revealed that a deal to sell the Russian assets of South Korean automaker Hyundai Motor was almost complete.

Volkswagen, along with other major foreign auto manufacturers, suspended operations in Russia last year as Western countries imposed sanctions over the conflict in Ukraine.

Its flagship plant in Kaluga, with capacity of 225,000 vehicles a year, sat idle while the German automaker was trying to sell its Russian assets.

Currently, Volkswagen is applying to the Russian authorities for approval to sell its stake in Volkswagen Group Rus, which includes the plant in Kaluga with more than 4,000 employees, “to a trustworthy Russian investor.” The firm has not given details on the deal, but media outlets have named Russian car dealer Avilon as a possible buyer.

The deal has not been affected by a legal dispute between Russian automaker GAZ and Volkswagen, which resulted in the freezing of all Russian assets of the German automaker, according to Kommersant.

In March, GAZ claimed that Volkswagen’s withdrawal put its operations at risk, and filed a lawsuit seeking 15.6 billion rubles ($201.3 million) in damages over the terminated contract.

Chery has been in talks with Russia about localizing production since last summer, and is now reportedly set to launch car assembly at the Kaluga plant.

Hyundai, which also suspended production in Russia last year, may sell its manufacturing unit in St. Petersburg to an auto-related company in Kazakhstan. The deal is in the final stages, and could be signed as early as June, the outlet said.

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