Volvo Truck has started production at a new €100m plant in Kaluga, Russia and will feed assembly with parts from its Swedish component factories in Umeå (truck cabs), Skovde (engines) and Koping (transmissions).
Volvo Logistics is handling all inbound deliveries and outbound  movements to the Russian market and neighbouring CIS countries. There will also be a number of customer pick-ups at Kaluga.
The plant, which is 200km southwest of Moscow, has an annual capacity for 15,000 trucks and will share production with Renault – 10,000 trucks will be assembled by Volvo, with the remaining 5,000 made by the French truckmaker on a separate assembly line.
The new models include the Volvo FH/FM/FL and FE and the Renault Premium and Kerax.
The new plant answers the increased demand that Volvo Trucks has received from the Russian market and which its existing 500-capacity CKD plant in Zelenograd (outside Moscow) was struggling to meet. And new, higher Russian customs duties for imported trucks mean production inside the country is more cost-effective than making up the shortfall with trucks from Sweden.
"By being in the Kaluga region we will be close to our customers as well as in a booming automotive region in Russia," said Volvo spokeswoman Lena Nordstrom. 
The company says production volumes at Kaluga will start with low volumes in order to fine tune the production process and then increase according to demand.
Volvo has 39 authorised workshops in Russia, including two wholly-owned Volvo Truck Centres in St. Petersburg and Moscow. A third centre will be opened in Kaluga later this year.
Foreign investment in the Kaluga region increased 300 per cent in 2008 year-on-year, reaching around $1 billion. Automotive investment includes Volkswagen, which is already building vehicles there, and France's Peugeot-Citroën which has started constructing a car factory due to launch production in 2010.