( RIA Novosti ) - Swedish car maker Volvo announced on Monday the beginning of the construction of a truck plant in the Russian region of Kaluga, southwest of Moscow.
Volvo Trucks will set up a plant to construct both Volvo and Renault trucks in a free economic zone outside Kaluga, a city about 188 km ( 116 miles) southwest of Moscow, estimated to amount to some 3.5 billion rubles ($134.72 million) worth of investment.
Speaking at the laying of the foundation stone, Lars Corneliusson, the managing director of Volvo Vostok, said the company intends to occupy at least 10% of the Russian cargo transportation market in the future.
He also said that the company plans to start construction of excavators at the plant in Kaluga, beginning in 2010.
The facility in Kaluga is expected to begin operation in 2009, and will produce 10,000 Volvo and 5,000 Renault trucks a year. The Kaluga Region has allocated 40 hectares ( 99 acres) of land in Kaluga-Yug for the Volvo plant.
Volvo has operated an assembly line near Zelenograd, in the Moscow Region since 2003. However, while running at full capacity, the assembly line only produces some 500 cars a year.