German automaker Volkswagen is considering selling its plant in Kaliningrad, Russia, to a Chinese manufacturer.

Key Highlights :

1. Chinese car manufacturer Chery is set to launch production at a former Volkswagen factory in Kaluga, southwest of Moscow.

2. The deal to sell the Russian assets of South Korean automaker Hyundai Motor is almost complete.

3. 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.

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

5. Hyundai, which also suspended production in Russia last year, may sell its manufacturing unit in St. Petersburg to an auto-related company in Kazakhstan.

     Chinese carmaker Chery could start production at a former Volkswagen factory in Kaluga, Kommersant has reported. The plant, which is set to cost 1.5 billion euros to build, will make the Chery A3 and A5 models. It is expected to start operations in 2020.

     Chery, which is owned by the Chinese automaker Geely, is the latest automaker to announce plans to build a plant in Russia. Earlier this year, Renault announced it would build a plant in St. Petersburg, and Ford is also expected to invest in Russia.

     The Russian market has been growing rapidly, and the country is expected to become the fifth biggest market for cars by 2020. In 2017, sales in Russia increased by 10 percent compared to the previous year.

     The Volkswagen plant in Kaluga is set to close in 2019. The company has already started the process of moving its employees to other plants.

Continue Reading at Source : rt