Volkswagen Group and GAZ Group extend cooperation in Russia

Volkswagen Group and GAZ Group defined further joint project in three different fields of cooperation. Official documents were signed in Nizhny Novgorod, in the presence of the Governor of Nizhny Novogorod Valery Shantsev.

Prolongation of contract manufacturing agreement

Volkswagen Group Rus and GAZ Group are extending their joint project to produce Volkswagen and ŠKODA cars at Gorky Automobile Plant and are opening up new development opportunities for the brands’ model ranges. Marcus Osegowitsch, General Director of Volkswagen Group Rus, and Vadim Sorokin, GAZ Group president, signed the new agreement which extends the joint project until 2025, defines the model versions to be produced in Nizhny Novgorod, and sets out the plans to adapt GAZ production capacities for the launch of new models for Volkswagen Group Rus.

The cooperation between Volkswagen Group Rus and GAZ Group started in 2011 with the signing of an agreement for the contract assembly of Volkswagen and ŠKODA cars at the GAZ plant. Under the project, new assembly and body shops were built at GAZ, the paint shop was modernized, logistic and quality control systems were improved, and production of components for Volkswagen and ŠKODA vehicles was established. GAZ personnel were trained at Volkswagen and ŠKODA plants in Germany and the Czech Republic, and a new training center was opened at GAZ. The total number of cars produced so far under the cooperation between Volkswagen Group Rus and GAZ Group totals some 200,000. This includes Volkswagen Jetta and Passat as well as ŠKODA Yeti and Octavia produced in Nizhny Novgorod.

Marcus Osegowitsch commented: “We are extending our successful partnership with GAZ Group for contract manufacturing because local production has always been a key element of the Volkswagen Group’s long-term development strategy in Russia. Even during last three crisis years we continued to develop our business in Russia, investing an additional € 500 million in production and facilities. We are proud to be part of the Russian automotive industry, to support its development, and to provide new jobs.”

Vadim Sorokin commented: “The agreements signed today confirm the success of our cooperation with Volkswagen Group Rus which already spans more than five years, and open up a new stage in our cooperation. We are thus starting the second life cycle of our industrial cooperation.”

Maximum annual production capacity at the Gorky Automobile Plant is around 110,000 vehicles. Total investment in equipment and infrastructure amounted to € 300 million. Currently, around 3,000 employees assemble the Volkswagen and ŠKODA models at the GAZ plant in Nizhny Novogorod.

Supply of Volkswagen 2.0 TDI engines from the plant in Salzgitter, Germany for GAZ production

There is to be an additional, second step in the cooperation between the parties with a view to developing the model range and growing product sales volumes. GAZ Group plans to equip GAZ vehicles with Volkswagen TDI 2.0 engines from the Salzgitter plant in Germany. The diesel engines, which fulfill the Euro-6 environmental standards, will be integrated in the new GAZelle NEXT family, which includes drop-side trucks, full-metal vans and minibuses. Volkswagen will provide technical support to integrate the engines in the GAZ model range.

Thomas Schmall, Member of the Volkswagen Brand Board of Management responsible for ‘Components', commented: “We are pleased to be strengthening our partnership with GAZ Group through the engine supply project and to be contributing to the Russian automotive industry as a producer of automotive components.”

Siegfried Wolf, Chairman of the Board, Rusian Machines Corporation, commented: “Expanding cooperation with the Volkswagen Group will ensure further modernization of Gorky Automobile Plant's capacities and give a new impetus to the development of our model range and growth of GAZ export sales.”

Letter of intent between Volkswagen Truck & Bus and GAZ

Volkswagen Truck & Bus and the GAZ Group signed a letter of intent, which will enable the companies to identify the possibilities for a long-term strategic partnership. The main focus will be on the delivery and joint assembly of components as well as joint product and sales concepts.

The main focus will be on the delivery and joint assembly of components as well as joint product concepts.

The Volkswagen Truck & Bus Group with its brands MAN, Scania, and Volkswagen Caminhões e Ônibus as well as the GAZ Group, which is the largest manufacturer in Russia of light-, medium- and heavy-duty commercial vehicles, already have a long-standing partnership in the bus sector. Now, this relationship of trust is to be intensified to the mutual benefit of both companies. Volkswagen Truck & Bus has a comprehensive portfolio of technologies as well as an extensive international sales network. As the largest manufacturer of vans, trucks, buses, and passenger cars in its home market, the GAZ Group has an excellent local competence and infrastructure.

Andreas Renschler, Volkswagen AG Board of Management member responsible for commercial vehicle activities and CEO of Volkswagen Truck & Bus and Manfred Eibeck, Russian Machines Chief Executive Officer, today signed the letter of intent in the presence of the Governor of Nizhniy Novgorod, Valery Shantsev, as well as representatives of the press.

As a next step, the companies will carefully examine possible projects.

The GAZ Group’s cooperation with companies of the Volkswagen Truck & Bus Group has started more than a decade ago. MAN has delivered more than 5,500 engines for GAZ Group’s LIAZ city buses since 2007, operating in Moscow, St. Petersburg and other major cities in Russia as well as some export markets. With Scania the cooperation started in 2005 and resulted in the creation of CRUISE tourist coaches and VOYAGE-series inter-city coaches for sale on Russian and export markets. 1,600 GAZ Group buses were built with Scania components.

In 2014, the GAZ Group and Scania delivered more than 700 buses and coaches for the Olympic Games in Sochi. Today the companies are engaged in joint development of a new modification of CRUISE bus with new interior design, improved customer features and Advanced Driver Assistance Systems (ADAS). The coach will be offered as the optimal solution for transportation of teams and fans in the cities of Russia, hosting 2018 FIFA World Football Cup.

Andreas Renschler, Volkswagen AG Board of Management member responsible for commercial vehicle activities and CEO of Volkswagen Truck & Bus:

- With this letter of intent, we are taking another important step in our Global Champion strategy and are clearly demonstrating our commitment to the Russian market. The GAZ Group has a leading role in the Russian commercial vehicle market and has been a reliable partner for us for many years.”

Manfred Eibeck, Chief Executive Officer of Russian Machines Corporation:

- Our joint work with the Volkswagen Group has resulted in production at GAZ facilities of approximately 200,000 Volkswagen and Skoda cars and more than 7.000 GAZ Group buses with Scania and MAN components. Expansion of cooperation between the GAZ Group and Volkswagen will make it possible to explore our capabilities for the development in commercial transport segments across the globe.”