By Andrey Ostroukh
MOSCOW--Russian car factory Avtotor and BMW AG (BMW.XE) have
agreed to expand production in Russia's Kaliningrad region,
Interfax news agency reports Friday, citing Avtotor Holding's
president.
Avtotor, which already assembles BMW cars in the Kaliningrad
region, a Russian enclave on the Baltic Sea between Poland and
Lithuania, voiced interest in building a new factory in 2012. Back
then, the project envisaged that Avtotor and BMW would each invest
50 million euros ($69 million) into the project.
Speaking to reporters, Avtotor President Valery Draganov said
the two companies are close to signing a cooperation deal to build
the new factory. Mr. Draganov said construction works are expected
to start in the middle of 2014, without disclosing the actual
amount of money that the two companies will invest, Interfax
reports.
The Russian automobile market experienced a decline in sales for
several months before March, when sales nearly flattened. The
Association of European Businesses in Russia predicted in January
that auto sales would decline 1.6% in 2014 following a 5.5% drop
last year, which ended three years of strong growth.
Many analysts had predicted that Russia would soon become the
leading car market in Europe, but most now have said this is
unlikely to happen until the end of the decade.
Write to Andrey Ostroukh at andrey.ostroukh@wsj.com
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