Russian Media: BMW intends to build a full cycle plant in Russia
The German company BMW intends to build a full-cycle car assembly plant in Russia, Vedomosti newspaper reports citing a source familiar with BMW management. The probable location for the production facility is the Kaliningrad region.
The Kaliningrad Region is located in a special economic zone (SEZ), whose residents receive budget subsidies covering the costs of customs payments when importing components. As the interlocutor of Vedomosti specifies, welding and tinting of (cars’) bodies will be carried out at the plant. It is noted that the production capacity of the enterprise will be "consistent with sales in Russia".
As BMW's Vice President Hendrik von Künheim explained, the company intends to increase the level of localized production. "There are several technological zones in Russia where cars are manufactured, including the Moscow, Kaluga, St. Petersburg, and Kaliningrad regions. We have analyzed all the locations and are now at the decision-making stage," the Vice President stated. According to him, the decision-making process can take "several weeks or months".
According to Künheim, BMW investments might amount to several "hundred million euros".
As reported by the management of the holding company, Avtotor, it is necessary to sign a special investment contract prior to launching these production facilities that requires state approval. However, as the Deputy Head of the Industrial Development Fund (operator of investment contracts), Vologodsky, stated that BMW has not applied for a special investment contractyet.
Since 1999, BMW automobiles have been manufactured at Kaliningrad’s Avtotor plant.