Volkswagen is looking for a buyer for a Russian car factory

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July 27 (Reuters) – Volkswagen (VOWG_p.DE) is looking to sell its car assembly plant in the Russian city of Kaluga and a Kazakh carmaker may be a potential buyer, Russian newspaper Vedemosti reported on Wednesday.

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

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

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

Vedemosti quoted his source as saying the Kaluga plant could be taken over by Kazakh company Asia Auto, based in the eastern city of Oskemen. It has a license to produce both Volkswagen and Skoda cars, the newspaper said.

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

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

New car sales in Russia fell 82% in June from a year earlier, reflecting sanctions affecting the supply of spare parts, soaring prices that hurt demand and the exodus of automakers strangers.

Russia’s auto industry has come to a near standstill since Moscow sent troops to Ukraine on Feb. 24.

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Reporting by David Ljunggren Editing by Bill Berkrot and Alistair Bell

Our standards: The Thomson Reuters Trust Principles.

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