LONDON -- Supplier GKN Driveline will start production at its first plant in Russia next year, the UK-based company said.
Suppliers are being drawn to Russia by automakers that hope to capitalize on forecast growth. Russia's new-vehicle sales are expected to rise to 4.4 million by 2020 from about 2.8 million last year, according to Boston Consulting Group. If that happens Russia would pass Germany to become Europe's largest new-car market.
GKN's factory will be in Togliatti, which is where Russia's largest automaker, AvtoVAZ, produces cars for its Lada brand as well as the Nissan Almera. Renault-Nissan is in the process of taking a majority stake in AvtoVAZ.
A GKN spokesman declined say whether the company already has supply contracts with Renault, Nissan, AvtoVAZ or any other automakers with factories in Russia.
"We are moving to the region to support our global customers, many of whom -- Renault Nissan/AvtoVAZ, Ford/Sollers, General Motors -- are already in place" in the country," the spokesman told Automotive News Europe.
Renault-Nissan aims to produce of 1.4 million vehicles for the Lada, Renault, Datsun and Nissan brands in Russia by 2015.
GKN said its factory, which will make constant velocity jointed sideshafts, will be "the first of its kind in the country."
"Russia is a key growth market for car manufacturers and this is an important step for GKN," GKN Driveline CEO Andrew Reynolds Smith said in a statement. GKN Driveline is part of GKN plc, which also has aerospace and construction equipment divisions.
GKN Driveline ranks No. 34 on the Automotive News Europe list of the top 100 global suppliers with worldwide sales to automakers of more than $6.4 billion in 2012.