New Volkswagen Plant in Russia

The way for a new Volkswagen AG production plant in Russia is clear. The Chairman of the Board of Management of Volkswagen AG, Dr. Bernd Pischetsrieder, and the Chairman of the Board of Directors of Skoda Auto, Detlef Wittig, signed the necessary contracts with the Russian Federation and the Kaluga Oblast in Moscow on Monday.

The new plant will be built in the city of Kaluga some 160 kilometers to the south west of Moscow. Representing the Russian partners, the contracts were signed by Minister German Gref on behalf of the Russian government and Governor Anatoly Artamonov on behalf of the city of Kaluga. “We will be significantly expanding our position in Russia over the coming years with this new plant. It represents an important strategic step for our Group, and also contributes to securing jobs in Germany,” commented Pischetsrieder.

"We are firmly resolved to tap the considerable growth opportunities offered by the Russian market,” said Pischetsrieder. He added that, due to high customs duties on imported automobiles, Volkswagen and Skoda models could only be offered at competitive prices if they were produced in Russia. “The new plant means lower customs duties and more attractive prices for our cars. That is how we can significantly increase our market volumes in Russia and thus raise capacity utilization at the Group’s component plants.” Pischetsrieder stated that the objective was to expand Group sales from some 30,000 vehicles at present to 150,000 units over the next four to five years.

During the run-in phase, semi knocked-down Volkswagen and Skoda brand models will be assembled in Kaluga from the second half of 2007. The Skoda Octavia will be the first model to leave the assembly line. Initially, some 20,000 units will thus be produced annually. At the same time, full production facilities comprising body shop, paint shop and assembly lines will be installed, with operation scheduled to commence in the first half of 2009.

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Gasoline prices delaying 'green' cars

Thirty-seven percent of consumers say high gasoline prices have them thinking about replacing their cars with more fuel-efficient vehicles. And half of those say they are considering a gasoline-electric hybrid, according to a new survey by Consumer Reports.

But when cost-conscious consumers actually look at hybrids, many of them will be turned off, predicts Douglas Love, a spokesman for Consumer Reports.

The first generation of hybrids, such as the Honda Insight and Toyota Prius, "were designed from the start to deliver great fuel economy," Love says. These cars use electric motors to supplement small gasoline engines for significant increases in mileage.

Although the tiny two-seater Insight is being discontinued, the Prius continues to fly off dealer lots, often at a premium over the sticker price. The Honda Civic Hybrid, another model designed mainly for mileage, is also selling well, but that's partly because of a redesign that has boosted sales of all Civics, including the non-hybrid version.

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Automotive corporate responsibility

Great news from TNS! Automotive companies are finally striking a chord with their social responsibility programmes in emerging markets. A great step towards building some strong local ties that can aid the production of cheap cars in the future.

The 2006 Global Corporate Social Responsibility (CSR) study, which was conducted in March and April across 16 countries, reveals that emerging markets such as Thailand, India, and China rate automotive companies higher in regards to corporate social responsibility than mature markets of the west. The study attributes this to the general public's high ratings of the automotive sector in emerging markets for generating jobs and improving quality of life.

Chris Bonsi, regional director TNS Automotive explains: 'Thailand, India, and China have recorded phenomenal industry growth in the automotive sector and consumers in these markets see automotive companies playing an integral role in the economic and social development of their country. Conversely, the governments of some emerging markets do not fully recognise the contribution of the automotive sector in generating jobs for their country - in some cases, levying high taxes on the automotive sector because the end-products are seen to be luxury items that only a few can afford, without considering the jobs the sector creates for everyday people manufacturing, distributing, and servicing these products.'

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Robotic cars driving inside city limits

Seven months after an unmanned Volkswagen successfully drove itself over the rugged Mojave Desert, the Pentagon is sponsoring another challenge for self-driving vehicles that can weave through congested city traffic without causing an accident.

The contest, to be held in November 2007, will test the vehicles' ability to independently carry out a simulated military supply mission in an urban setting in less than six hours.

The Pentagon's Defense Advanced Research Projects Agency, or DARPA, created the latest challenge to spur development of vehicles that could be used in the battlefield without any sort of remote control.

Participants will have to navigate a complex 60-mile test course in a yet-to-be-determined city filled with moving vehicles -- both manned and unmanned. The test course will be designed like a real city street where vehicles will have to make sharp turns, navigate intersections and avoid crashing into obstacles such as utility poles, trees and parked cars.

Equipped only with a computer brain and sensors, the participants will be graded on how well they can obey traffic laws, change lanes, merge with moving cars and pull into a parking lot.

The first vehicle that successfully completes the mission will win $2 million with second-place finishers claiming $500,000 while third place will receive $250,000.

Last October, the agency awarded $2 million to a driverless Volkswagen SUV, which beat out a field of 23 vehicles by traversing 132 miles of twisting desert and mountain terrain. While the vehicles had to drive on rough road and dodge man-made obstacles, they didn't have to drive in traffic.

''We believe the robotics community is ready to tackle vehicle operation inside city limits,'' DARPA Director Tony Tether said in a statement.

Stanford University computer scientist Sebastian Thrun, who won last year's race, said he was excited to see the agency take the challenge to the next level. Thrun said the artificial intelligence knowledge gained from the contest could also benefit society by pushing the development of ''smart cars'' that can self-navigate on highways and potentially reduce accidents.

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