After it announced back in May that it would not resume car production in Russia in the near future, Volkswagen Group, the world’s second-largest car manufacturer, has now reportedly decided to sell its business in Russia and is actively looking for a buyer.
Kazakhstan’s Asia Avto, which has a license to produce Volkswagen and Skoda cars, has been cited as a potential buyer and Volkswagen is allegedly expected to decide on the sale by the end of this year.
According to Gazeta.ru, the factory in the city of Kaluga in Central Russia, which has a maximum production capacity of 225,000 vehicles per year and employs around 4200 people, was also visited by a delegation from Austria.
Amid international sanctions against Russia, the production in Kaluga – which produced Volkswagen Tiguan, Volkswagen Polo, Škoda Rapid, as well as the Audi Q7 and Audi Q8 under license – was suspended in early March due to disruptions in logistics chains that also stopped the import of cars and spare parts to Russia.
The plant was also manufacturing petrol engines for an array of models.
Previously in July, Volkswagen suspended its vehicle assembly at the Nizhny Novgorod factory, citing the lack of EU-produced parts, critically important components from Ukraine, and domestically made equivalents, which added to the high level of uncertainty and the inability to predict the potential resumption of production.
Although it doesn’t own the factory, VW had a contractual agreement with commercial vehicle manufacturer Gaz Group, for assembling several of its models including the VW Taos and three Skoda models: the Kodiaq, Karoq, and Octavia.
The closure affected around 200 staff, but most of them have already taken voluntary payoffs, including medical insurance and a claimed six months’ salary.
Aston Martin, BMW, Ford, General Motors, Honda, and Jaguar Land Rover are among the firms to have halted sales in Russia ever since the EU imposed sanctions on Moscow due to its invasion of Ukraine.