Global automotive supplier Magna International (Aurora, Ontario / Canada; www.magnaint.com) and Russian car maker Avtotor Holding (Moscow; www.avtotor.ru) have entered a cooperation agreement to establish a full-cycle automotive manufacturing cluster in the Kaliningrad region of Russia.

The project will combine new vehicle production facilities and a number of 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 established in Kaliningrad. The components facilities will produce parts for Avtotor and may also supply other Russian automotive companies and export parts.

Magna will support Avtotor in the conceptual design and technical preparation of the automotive cluster and may serve as partner in components production in the Kaliningrad region. Guenther Apfalter, president of Magna Steyr, said: “Russia is an important automotive market with the potential to become the largest market in Europe. We look forward to working together with Avtotor to support the establishment of the automotive cluster in Kaliningrad.”

The final production capacity in the cluster is expected to increase in phases with the potential to reach up to 250,000 vehicles worth over RUB 300 bn (around EUR 7.5 bn) annually by 2018.