Once complete, the project is expected to combine new vehicle production factories and several new joint ventures for automotive components production. It is anticipated that up to six full-cycle vehicle assembly operations for different automakers, and up to 15 automotive components production plants, will be set up in Kaliningrad. The automotive components facilities will produce parts for Avtotor’s needs and may also supply to other Russian automotive companies, as well as export parts to other countries.

“Avtotor regards this project as a new effective model for cooperation between the participating international companies and automotive suppliers,” said Vladimir Scherbakov,chairman of Avtotor.  “In addition, we hope to contribute to a more rapid growth of bilateral trade, investments and the creation of new jobs in the Kaliningrad region.”

Magna plans to support Avtotor in the conceptual design and technical preparation of the automotive cluster and may possibly serve as partner for the localization of the components production in the Kaliningrad region.

“Russia is an important automotive market, with the potential to become the largest market in Europe,” said Guenther Apfalter, president of Magna Steyr.  “We look forward to working together with Avtotor to support the establishment of the automotive cluster in Kaliningrad."

The final production capacity in the new cluster is expected to increase throughout several phases with the potential to reach up to 250,000 vehicles per year by 2018, with an annual product output expected to exceed 300 billion rubles (around US$ 10 billion).