Volkswagen is moving into Russia with the opening of a new plant in Kaluga, which is designed to serve the needs of drivers in Moscow and St. Petersburg.

Detlef Wittig, CEO of the Czech company Skoda, a VW subsidiary, says that his goal is to sell 200,000 cars per year in that market by the year 2010. The plan calls for roughly 150,000 of the cars to be built onsite, with the remaining 50,000 imported.

Production is slated to begin in October, 2007, with the Kaluga plant's initial capacity being estimated at 30,000 units. Cars offered in the Russian market will be the Skoda Octavia, the Czech company's own lower-midrange car, as well as the similarly-sized VW Jetta. In addition, another small Volkswagen that is comparable to the VW Polo is on the design boards, and will be offered in the future.

Volkswagen estimates that they will sell 60,000 cars in Russia this year, 30,000 from its own marque, and 30,000 with the Skoda brand.

The Moscow area is already home to several automobile suppliers.