Volkswagen is selling its Russian plant: the deal is approved

Avilon, a large multi-brand car dealer holding, is the buyer of the plant near Kaluga.

Foreign manufacturers continue to leave the Russian market. Rumors that Volkswagen is going to sell its Kaluga plant appeared at the end of July last year. In the early spring of 2023, the media named potential applicants for the role of new owners of the enterprise — AFK Sistema and the dealer holding Avilon. In March, it became known that all local assets of VW were arrested at the suit of GAZ due to the loss of the Russian partner in the amount of 15.6 billion rubles.

The court lifted the arrest on objects of immovable and movable property of Volkswagen Group Rus (FGR) on April 3. A week later, the GAZ group filed a new lawsuit against Volkswagen (now for 28.4 billion rubles), it is also associated with the early termination of the agreement between the parties on the contract assembly of cars at the site in Nizhny Novgorod (the agreement was valid until 2025). However, this time the court refused to take interim measures, so it did not prevent us from continuing preparations for the sale of the Kaluga plant VW.

Now Vedomosti, citing its own sources, reports that the government commission for the control of foreign investment has approved the sale of the Volkswagen plant near Kaluga. According to their information, the car dealer holding Avilon will become the buyer of the enterprise. Official comments from representatives of the parties to the transaction have not yet followed. The speakers did not disclose the value of the deal.

Recall that SKD assembly at the Volkswagen plant in Kaluga, which is located on the territory of the Grabtsevo technopark, started in 2007. In 2009, the company switched to the production of machines in a full cycle (with welding, painting and assembly). The production capacities assume the annual production of 225 thousand cars. Before the crisis, Volkswagen Polo and Tiguan, as well as Skoda Rapid, rolled off the assembly line. In addition, in 2015, a motor plant began to operate, designed to produce up to 150,000 engines per year. VW has suspended production at the beginning of March 2022.

According to preliminary data, the Chinese company Chery may turn out to be the production partner of the Avilon dealer holding in Kaluga. A source familiar with the plans of the Chinese automaker noted that Chery continues to conduct relevant negotiations, but with several potential partners. Recently, Chery International President Jan Goubin said that the company wants «not only to sell cars in Russia», but also to develop in the Russian Federation «their production, and in such a way that there is a high degree of localization.»

According to Forward Legal partner Andrey Filippenko, “it can be assumed that the deal [on the sale of the Kaluga Volkswagen plant to the Avilon car dealership holding, — approx. ed.] will close fairly quickly if permission from foreign regulators is not required.”

Another large dealer holding, Avtodom, acquired the Russian Mercedes-Benz plant located in the Moscow region last fall. According to the plan, this site will be restarted before the end of this year. It is assumed that models of the Chinese luxury brand Hongqi (the name of the brand is read “Hunts”, in translation – “red banner”) can stand on the conveyor.