autoevolution 2012 2012 - invest.kaluga.ru file saint petersburg kaluga togliatti 219 000 183 000...

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Saint Petersburg

Kaluga

Togliatti

219 000

183 000

561 000

AutoEvolution 2012

2012

Five years ago it was announced that an automotive and auto component cluster would be created in Kaluga Region. Following the successful creation, the region achieved unprecedented results. Today, Kaluga Region is one of three largest centers of the automotive industry in Russia interms of output! These figures are impressive, especially for a region where development of the automobile industry seemed out of the question several years ago. The Automotive Cluster

revolutionized the region’s industrial complex and the very content of regional industrial policy. It became a powerful tool to stimulate social and economic development and, naturally, formed a solid foundation for implementing projects related to the competitiveness of production facilities, research and development, and the creation of newtechnology platforms and their industrial development.

Kaluga Region among Top Three Automotive Industry Centers of Russia

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InvestmentsInnovationsand Infrastructure

Automotive Cluster News

Volvo Customs Department Was Opened in Kaluga

The total area of the facility is 15,000 square meters, 2,000 square meters of which are occupied by the customs clearance area. Investment in the project is EUR 4.7 million. The existence of the customs terminal will help reduce the time for customs clearance from two days to 8.5 hours per unit of excisable cargo.

Volvo invests $119 million in the production of truck cabins in Kaluga 15,000 cabins for Volvo and Renault trucks will be produced annually as

part of the project. The launch is planned for 2014. The Volvo plant in Kaluga produces 15,000 Volvo and Renault trucks per year. According to 2012 results, sales of premium class trucks in Russia are expected to be 28,000 units - that is two times higher than in 2010.

One of Continental’s buildings nears completion in Kaluga

The finishing touches are put to the first building of the Continental plant in Rosva Industrial Park. Elmar Degenhart, Chairman of the Continental AG Board, praised the high speed of the project’s completion. They are planning to launch the mass production of tires at Continental Kaluga OOO in October 2013. The plant will reach the designed capacity of 4 million tires per year by late 2016 and thereafter double.

Peugot, Citroen and Mitsubishi Motors Alliance switch to full production in Kaluga According to Didier Alton, Director General of the plant, once the full

cycle by PCMA Rus has been achieved, Kaluga will produce one model of each alliance’s brand. These are the Peugeot 408, the Citroen C4L and the renewed Mitsubishi Outlander. The total output will be 125,000 cars per year: French cars will account for 85,000 of this total, and the Japanese Outlander for 40,000.

The German MAHLE Group chooses Kaluga Region МАHLЕ is one of the key developers and manufacturers of components,

engine systems and filters for the automotive industry. MAHLE will build warehouse facilities in Vorsino Industrial Park to supply components and engine systems to automotive plants in both Kaluga Region and Byelorussia. The total investments is EUR 12.5 million. The launch is planned for early 2014.

VOLKSWAGEN AG Will Build an Engine Plant A plant with a capacity of 150,000 units per year will be built by 2015 in

Grabtsevo Industrial Park. Petroleum engines of a brand new series (EA211 of 1.6 liters) will be supplied to the Volkswagen plant in Kaluga and an assembly line in Nizhny Novgorod. The cost of the project is EUR 250 million.

A new module is opened in the Automotive Industry Training Centrer

New facilities will fulfill the automotive cluster need for professionally trained personnel. The Center is furnished with advanced equipment and world-class methodological base for simultaneous training of 400 persons. The Center has already trained over 7,000 specialists for automotive industry companies.

SHAPERS launches in Kaluga Region The Shapers’ Group plant in Kaluga repairs and modifies various types of

casting and non-casting equipment for the processing of plastic materials and moulds for metal forming. The total investment is EUR 3.5 million. Production facilities within the Kaluga Automotive Cluster have already become partners of the company.

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The car-making industry has become a fundamentally new and rapidly developing branch of the economy of Kaluga Region. Motor vehicles are forecast to account for 50.5% of the region’s industrial production by 2013. This will significantly pre-define the general trend of industrial growth in Kaluga Region. In general, from 2011 to 2014 this indicator is set to increase by 1.4. In 2011, production facilities within the region assembled 10% of all cars manufactured in Russia. This figure reached 12% during the first six months of 2012.

12 000new jobs created at automotive cluster production facilities

3 automotive industry OEM manufacturers in Kaluga Region

25 facilities manufacturing auto components15 commissioned10 under construction

520 000 vehicles have been produced by the KalugaRegion Automotive Cluster since 2007

132 188 cars manufactured within the first 6 months of 2012i.e. over 12% of the total numberof cars manufactured in Russia

89 814 cars produced by the Volkswagen productionfacility within the first 6 months of 2012

17 models manufactured by the Kaluga Region Automotive Cluster

AutoEvolution - 2012

Automotive Cluster: Facts and Figures

Key Success factors

loCAlIzATIonof pRoduCTIon

fAClITIEs

GRowTh of R&d

EduCATIon And humAn REsouRCEs

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Automotive Cluster Production Sector

ОЕМs

Suppliers

Today, the Kaluga Region Automotive Cluster consists of 28 companies. Its evolution can be divided into several stages. The first breakthrough project was the construction of a plant producing Volkswagen passenger cars. In the annual report of the Russian Ministry of Economic Development, this event was marked as one of the major achievements of 2006. In 2007, the Volvo Truck Group decided to build a plant. This was an important and well-timed project for the Russian market as a whole, as the company began to produce trucks of a type which were not available within Russia, thereby filling a gap in the market. In 2009, a French-Japanese joint project between PCA Peugeot-Citroen and Mitsubishi was launched. At the same time as the car assembly plants started work, components manufacturers began pro-duction in the region. In 2012, almost all car manufacturers in Kaluga announced a growth in sales and plans to increase output. In quantitative terms, sales in Russia amounted to about 260,000 cars, according to August figures

Capacity – up to 180,000 vehicles per annum

2 brands: Volkswagen and ŠKODA

Capacity –up to 125 000 vehicles per annum

3 brands: Peugeot, Citroen and Mitsubishi

Capacity – 15 000 vehicles per annum

2 brands: Volvo and Renault

VOLKSWAGEN Group Rus

25

companies

40%Localization of

Volkswagen Polo sedan

33%Total percentage of localization

at PCMA Rus 15 operational 10 under construction

PCMA Rus Volvo Trucks

Engine productionPlant of VW AG

ExhaustInterior

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Original Equipment Manufacturers (OEMs)

3 OEMs have their production facilities in Kaluga Region:

VolKswAGEn Group Rus, pCmA Rus, and Volvo Vostok. Currently, they are the core of the Kaluga Automotive Cluster.

With a production capacity of up to 200,000 cars per year, its output was 300,000 cars in 2011. The plant produces about 600 cars per day. The com-pany operates in three shifts, 6 days a week, and employs over 6,000 people. Currently, the range of cars produced includes 6 models: 4 models are produced in the CKD mode (the Volkswagen Polo sedan, the Tiguan; the Skoda Fabia and the Octavia) and 2 in the SKD mode (the Volkswagen Touareg and the Multivan). The plant operates an industrial assembly line, which provides for a 60% level of lo-calization and organization of facilities to produce engines and/or transmissions in Russia. A 40% level of localization has already been achieved for the Polo sedan.

The total output of Volvo Vostok is about 15,000 vehicles per year (10,000 – Volvo and 5,000 - Re-nault). The range of models is the Volvo FH, FM, FL; the Renault Premium, and the Kerax. The number of employees is currently about 750 people; when the plant reaches its designed capacity, this will reach 1,000. The company actively negotiates an agreement for the assembly production of cabins and chassis with federal ministries (the Ministry of Industry and Trade and the Ministry of Economic Development). A plant for the production of Volvo construction equipment is being built near the Vol-vo Vostok facilities in Kaluga-Yug Industrial Park.

The Peugeot Citroen and Mitsubishi project (PCMA Rus OOO) has a production capacity of 125,000 cars per year. In summer 2012, the plant launched production in the CKD mode. The plant has more than 800 employees. When the plant reaches its full capacity, the number of employees will be 3,000. The plant produces the following models be-longing to three brands: the Peugeot 308, the Citro-en C4, the Citroen C4 new (class C), and the Peugeot 4007, the Mitsubishi Outlander and the Citroen C-Crosser (light sport utility vehicles - SUVs). In 2011, the plant produced more than 44,000 vehicles - 63% higher than the previous year.


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Volkswagen Views Russia as Its Key strategic Growth market

The Volkswagen Group Rus plant is located in Grabtsevo Industrial Park. The very history of the Kaluga Region Automative Cluster began with the signing of an agreement between VW and the

Russian government in 2006. In 2007, Volkswagen Group Rus started production. In 2009, the plant began full-scale production and the official ceremony to mark this occasion was attended by Vladimir

Putin and other top government officials. Volkswagen AG is the largest foreign investor in the Russian car industry. The company invested EUR

774 million, including EUR 570 million in plant construction.

dr.Josef Baumert, Volkswagen Group Rus Plant Manager

In 2011 Volkswagen Group Rus sales in the Russian mar-ket grew by 74% and reached 229,000 vehicles, including over 135,000 vehicles which were manufactured in Russia. Volk-swagen brands are market leaders in Russia. Volkswagen has an 8.8% share in the car sector, and 5.9% share in the com-mercial vehicles sector.

Are you satisfied with the VW project development in Kaluga? How many cars does Volkswagen Group Rus produce to-day?

Production at the Kaluga plant is in full swing. Today Volk-swagen Group Rus manufactures 160,000 vehicles per annum, including Volkswagen, ŠKODA and Volkswagen commercial vehi-cles. Currently the plant employs about 6,000 people. The suc-cess of our Kaluga project is largely attributable to the support of the government of Kaluga Region and in particular Anatoly Artamonov, the governor of the region.

Last month VW AG announced its plans to build an en-gine plant. Why have you chosen Kaluga Region as the place to build the new facility?

The construction of the engine plant will help VW expand its production capacity in Russia and meet the requirements of an additional agreement on industrial assembly signed in May 2011. Choosing a specific site depends on many factors. In the case of our engine plant, the decisive factors were the proxim-ity to our car production facility, and the positive experience gained during the car plant construction in Kaluga, and also the beneficial geographic position and its proximity to the Moscow market. Apart from that, the openness and support provided by the Kaluga Regional government, which demonstrates excellent political and economic vision, were among the key factors be-hind the decision.


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АVW cars are tradition-ally very popular with Russian consumers. This can be explained by the wide range of products in the VW portfolio, flexible pricing, efficient quality control, as well as a wide variety of models - from budget to premium and luxury vehicles. Can you describe the company’s future in the Russian market?

We in Volkswagen view Rus-sia as the key strategic growth market in Europe. We plan to in-crease annual sales to 500,000 vehicles by 2018.

In order to attain this objec-tive VW plans to invest EUR 1 billion in Russia to develop new products meeting market re-quirements, to further localize production, as well as to build an engine plant in Kaluga. As you can see, Kaluga plays a vital role here

What do you think of the future of the automotive in-dustry in Kaluga Region in particular and in Russia in general?

I believe that VW has a bright economic future in Kaluga. The construction of our new engine plant shows that Volkswagen is still a powerful driving force in the Russian automotive market and the Russian economy in general.

Today the pool of VW suppliers includes 25 auto com-ponent manufacturers. Further localization, R&D etc - how suc-cessfully, in your opinion, are these objectives addressed in the Kaluga Automotive Cluster?

Some world-renowned auto component manufacturers have already built their plants in Grabtsevo and Rosva Industrial Parks, and are successfully developing their business. Magna, Benteler, Visteon, Yapp, Fujao currently operate in Kaluga Re-gion. We already work with many of the suppliers. The key objec-

tive for all stakeholders here is to work together to support fur-ther development of local businesses and the region in general.

Volkswagen Group Rus is one of the largest companies in the region. Its presence has not only visible economic effects, but also a significant social impact. Could you tell us about some social projects?

Volkswagen Group Rus actively supports various social initia-tives. For the third year in a row we are the general sponsor of Kaluga Football Club.

Also, I would like to mention that we presented the 300,000th car manufactured in Kaluga in 2011 to the Doverie Disabled Chil-dren’s Rehabilitation Center in Obninsk. Volkswagen Group Rus views itself as a good corporate citizen, therefore a special focus is given to the creation of jobs and good working conditions for disabled persons.

It is worth mentioning that in 2011 Volkswagen improved the social benefits package offered to its employees. Starting from 2011 all Kaluga employees can get a voluntary medical insur-ance policy.


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List of Suppliers The list of suppliers currently includes 25 facilities producing auto components. 15 plants are already in operation and an additional 10 plants

are under construction. They include Kaluga plants of well-known international brands:

YAPP Automotive Parts Co., Ltd (feed system: plastic elements of fuel systems: tanks and pipelines). The plant has been operational since 2011. Number of employees – 130.

Benteler Automobiltechnik GmbH (transmission: suspension components). The project is implemented based on a build-to-suit approach as a part of the A-Park project. Construction of the 2nd stage is being completed. 250 persons people work at the plant.

Magna Exterior & Interior Management GmbH (exterior – bumpers, mirrors, front modules). The plant is located in Grabtsevo Industrial Park. The number of employees once fully operational will be 340 persons.

Faurecia Investments SA (interior – seats). The number of jobs provided for by the project is 150. 2 production facilities to manufacture seats and produce exhaust systems are being constructed in Rosva Industrial Park.

Gestamp Severstal Kaluga (a Russian-Spanish jointVenture producing body parts). Severstal Gonvarri Kaluga (a Russian-Spanish joint venture,

a service steel industry center). Around 300 people work at the two plants.

Visteon Deutschland GmbH (interior – door lining). 60 persons are employed at the plant. The project is based on a build-to-suit approach as a part of the A-Park project.

In late 2011, the ground breaking ceremony took place at the Continental tire production plant. The plant is in Rosva Industrial Park. In addition, Continental AG purchased a 100% share in AVTEL NPP OOO in Kaluga. The company produces and supplies components for electronic fuel control systems and ignition for internal combustion engines to domestic plants.

FUYAO, a Chinese company, is building an automotive glass production plant in Grabtsevo Industrial Park.

Bosal, Lear, Scherdel, Rucker, HP Pelzer, and HT&L Fitting lo-cated their production facilities in leased premises. Becema, a Russian producer of components (detachable equipment for trucks: tanks, etc.) is constructing a plant in Kaluga-Yug Indus-trial Park.

In August 2012, Volkswagen AG Group announced its plans to construct a plant for the production of internal combustion engines with a planned average capacity of 150,000 engines per year.

Auto component manufacturers coordinate their production and expansion plans with local OEMs. An example is Gestamp-Severstal-Kaluga, which plans to launch a new forging line in late 2012 or early 2013. The most important task today is to increase the volume of orders for components. This will ensure that suppliers have profitability. The decision of Volkswagen AG to build the plant in Kaluga offers the possibility to engage suppliers on a new level.


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«our project is developing according to plan…»

Since 2010, the Kaluga plant of Magna, the world’s largest manufacturer of auto components, has been producing plastic

interior and exterior parts for cars assembled in Russia. The first customer of Magna Exteriors & Interiors Kaluga was

Volkswagen plant located in the same industrial park. Since April 2011 products of the plant have been supplied to a

Kaluga branch of PCA Peugeot Citroen and Mitsubishi alliance...

dmitry popov, Director General, Magna Exteriors & Interiors Kaluga

Magna Exteriors & Interiors localized its production facilities in Kaluga Region in 2010. What is its production capacity and how many people work at the plant today?

Our production capacity meets the needs for finished colored bumpers of both Kaluga and Moscow carmakers. At the moment, we produce bumpers for Volkswagen Group Rus, PCMA Rus, and Avtoframos. We also paint exterior elements for the Nissan X-trail and the Nissan Teana for a branch of Magna Tehnoplast in Saint Petersburg. Currently, the number of employees is about 445 people, including temporary staff.

Kaluga is a region of opportunities. Do you manage to achieve set goals and implement projects?

Our project is developing according to plan In 2010, we launched full-scale production with a startup of six projects. In 2011, seven more projects were implemented. In 2012, two new products were added to our range of manufactured products. The launch of four more projects is expected in 2013.

What are plans of the company for the future? Do you intend to expand the business in Kaluga Region and in Russia?

In both the Kaluga Automotive Cluster, as well as in Moscow Region, we are working to get more projects and

orders that will increase production and extend our presence in both regions. In spring 2012, a contract was awarded to Magna Technoplast by Volkswagen Group Rus for production in Nizhny Novgorod of bumpers and front modules for the VW Jetta, the Skoda Octavia A7, and the Skoda Yeti FL;, front module frames and dashboards for the Skoda Octavia A7 and the VW Jetta models; as well as for the assembly of door panels for the VW Jetta and the sequencing of door panels for the Skoda Octavia A7 and the Skoda Yeti. Joint work will help to strengthen the position of Magna Exteriors & Interiors in the Russian market as a supplier of coated exterior parts. It will also provide an opportunity for further growth and development in the production of interior parts. As part of the preparation for production, the plant in Nizhny Novgorod is being revamped and new casting equipment, coating line and assembly equipment have been purchased.

The branch of Magna Technoplast in Saint Petersburg is also moving forward: the recently opened company is gradually becoming a major supplier for automotive companies operating in the Saint Petersburg area. The booming market of Saint Petersburg and its region offers great opportunities, and the company strictly adheres to the principles of high production efficiency and strives to expand its client base. A project to produce bumpers for Ford Mondeo cars is at the implementation stage. In July 2012, it produced the first batch of internal trunk lining elements for the Nissan X-Trail.

In March 2006, ShinYoung entered into a strategic alliance with Magna Cosma International, as a result of which COSYM Holding Ag, with two subsidiaries in Russia, was established: COSYM OOO and Shin Yang Rus OOO. The companies supply forged and welded units for the new Hyundai assembly plant in Saint Petersburg. Key clients of COSYM OOO include automotive plants of General Motors, Nissan in Saint Petersburg and the Volkswagen plant in Kaluga. Currently, negotiations on possible collaboration are underway with other carmakers in Russia.

Currently the Kaluga Automotive Cluster is among the top three Russian motor vehicle-producing. How do you estimate the development prospects of the automotive industry in Kaluga Region in particular and in Russia in general?

If you look at the variety of car brands in Kaluga Region, the automotive industry is definitely the industrial leader in Kaluga Region . Carmakers are trying to localize the production of auto components in Russia, which certainly influences the composition of tier-1 and tier-2 suppliers here. The launch of the Continental Kaluga tire production facility to produce 2 million tires per annum, the construction of the Volkswagen engine production facility to manufacture 300,000 engines per annum, and the construction of the Volvo full-scale cabin assembly plant to manufacture 15,000 units will further strengthen the region’s position in the automotive market. Taken all together, these factors will determine the second wave of development of the automotive cluster in Kaluga.

In 2012 we saw sales recovery up to the level of 2008. If the economy is not affected by crisis, the year 2013 will mark a breakthrough and make Russia the largest market in Europe in terms of the number of vehicles sold (more than 3 million vehicles). A huge market potential in Russia isdictated by two


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dictated by two factors: a low ratio of cars per 1,000 persons (280) and the high number of old cars (more than a half of the Russian cars are older than 5 years).

Increasing the production localization percentage, extending R&D, and integrating local suppliers in the supply chain are aims of the Kaluga Automotive Cluster. What measures, in your opinion, should be taken to successfully achieve these objectives and what parties should be involved in the process?

At present, we are interested creating a pool of suppliers and supporting healthy competition among them. The key objective is their further development in accordance with the requirements of European companies.

Does Magna participate in social projects, implemented together with the government of the Kaluga Region?

Yes, our team is trying to participate in initiatives proposed and implemented by the government of Kaluga, and also runs its own social projects. Some employees relocating from other regions were given mortgages on houses in Voskresenskoe village. The government’s partial reimbursement of housing costs allows employees of various Kaluga companies, including ours , to get money back for a portion of the costs.

This year, our employees took part in the annual voluntary Saturday work in the Child Care Center for Children Affected by Diseases of Central Nervous System as part of our charity work. Magna Exteriors & Interiors Kaluga sponsored the purchase of summer clothes for children. As part of the Tours to the World of Professions Project, we invited students of the Redkino Foster Care School to participate. Additional funds were allocated to replace windows in the canteen of this school. During August’s Hello School campaign, we donated funds for the purchase of stationery supplies for children from impoverished families.

In reply to a request from the City Mayor - Improving City Parks - we installed a ‘Reconciliation Bench’. In addition, we are involved in sports and public activities and we are one of the sponsors of the World Guitar Festival. During the City’s Annual Celebrations, we presented Austria as a host country to Kaluga residents.

We also take care of the health of our employees. The company implemented the Smoke-Free Working Environment Program. Its goal is to reduce the number of smokers among employees. For 3 months lectures were held, health days were organized and nicotine gum was offered. As a result, 50 persons quit smoking, received a certificate for the purchase of sports goods and a bonus to their wages.

Grabtsevo Ip


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The training of skilled personnel is a key issue not only for the region, but for the whole industry. In order to upgrade the education system to meet current needs, Kaluga Region is establishing specialized training centers. The Automotive Industry Training Center is a unique educational institution in Russia. An important part of its work is based on cooperation and joint projects with companies and suppliers of equipment

and technology, as well as with European training organizations. As a major part of the automotive cluster, it readily responds to the needs and recommendations of the productive core. The new training center functions as a college of higher learning; new professions and specializations are licensed, new faculties and departments are opened. 11 new major courses were launched in educational institutions in the region over the last two years.

In order to improve competitiveness, the region’s authorities are investing in improving the quality of life. Key requirements for living conditions are included in the ‘Housing for Professionals’ program. This document is intended to support developers implementing integrated housing projects in close proximity to industrial parks, and to support professionals

working at production facilities located in these industrial parks. Housing complexes, which are constructed under this program, will provide housing not only for Kaluga residents, but also to specialists coming to the region from neighboring areas. More than 12,000 jobs have already been created in Kaluga Region and this figure will double in the coming years.

Human Resources for the Automotive Cluster Modernization of traditional industrial companies

Total area — 10,500 m2

No. of workshops and labs — over 30No. of trainees (trained simultaneously) — 500 people No. of short-term training programs — 100No. of state vocation programs — 25No. of people trained (total) — over 7,000 people No. of people trained (for VW) — over 4,000 people No. of people trained (for PCMA) — 1,800 people

HR sources

— Graduates of professional educational institutions

— Approximately 20,000 residents work outside the region

— Participants of the Compatriots’ Voluntary Relocation program

— HR resources from the neighboring regions

— World renowned recruitment agencies

— Modernization of the traditional industry companies

Bauman Moscow State Technical University branch

Obninsk Nuclear Energy Institute under MIFI NationalResearch University

Bryansk State Technical University branch

«Investment in education will lay the foundation for a powerful economy, especially in the period of transfer from the industrial society to the knowledge-based society»

Anatoly sotnikov, Director General, Agency for Innovative Development – Center for Cluster Development of Kaluga Region


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E-mail: [email protected]

AutoEvolution 2012 III International Forum for Development of the Automotive

Industry and Production of Auto Components in Russia

For the third consecutive year, AutoEvolution gathers the elite of the worldautomotive industry in Kaluga. The business program of the forum includes a series ofevents to discuss topical issues relating to the achievement of strategic objectives in

the development of the Russian automotive industry.

Key topics of the forum: Potential and economic conditions for the development of the automotive business in Russia:

a strategic view of business and authorities

Experience in the field of production facilities localization in Russia; localization prospects

Carmakers’ production and distribution strategies. What will change in connection with Russia’s accession to the WTO

Economic and technological obstacles to upgrading the Russian automotive industry and resources to overcome them

Personnel, technological and infrastructural support for the automotive industry development projects in the Russian Federation

Corporatetranslationservices

+ 7 (499) 241-75-72+ 7 (499) 241-55-37+ 7 (499) 241-59-82

[email protected]

Russia, Kaluga, Truda st., 33tel./fax : 7 (4842) 27-87-86

With the support of the Ministry of Economic DevelopmentPrepared by «Kaluga» News Agency


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autoevolution 2012 2012 - invest.kaluga.ru file saint petersburg kaluga togliatti 219 000 183 000...

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