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Putin says hopes GM, VW projects in Russia will be a success

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President Vladimir Putin said Monday he hoped that car-making plants in Russia of U.S.-based General Motors and Germany's Volkswagen would be a success.

MOSCOW, May 29 (RIA Novosti) - President Vladimir Putin said Monday he hoped that car-making plants in Russia of U.S.-based General Motors and Germany's Volkswagen would be a success.

"I hope the projects will be a success," Putin told a government session.

The Economic Development and Trade Ministry signed a deal with VW Monday to open a plant in Russia.

The new VW factory in the Central Russian region of Kaluga will assemble Polo, Passat, Touareg, Skoda and other models designed for the Russian market and is set to produce 115,000 cars annually.

Construction will begin in August 2006. The factory is expected to open in September 2008, and is slated to employ 3,500 people. Investment in the new factory will total 270 million euros.

Economic Development and Trade Minister German Gref said GM intended to sign a deal on the construction of its car assembly plant in St. Petersburg in June.

Gref said GM was planning to invest $115 million in its plant, which would assemble three models, adding that the company would double investments for the second stage of the project.

Other foreign carmakers active in Russia include Ford, which currently assembles its cars in the Leningrad Region town of Vsevolozhsk, Renault in Moscow and General Motors, BMW and Kia in Kaliningrad, Russia's exclave on the Baltic Sea.

Japan's Nissan has said it is also planning to launch production in Russia soon. Russia's SeverstalAvto has signed licensing agreements with Fiat, Ssang Yong and Isuzu, while AvtoVaz and General Motors are producing the Chevrolet Niva 4WD.

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