On 28 August 2012, Volkswagen AG CEO Martin Winterkorn and Kaluga Region Governor Anatoly Artamonov signed an agreement on the construction of a plant manufacturing internal combustion engines in the region. The plant will have a production capacity of 150,000 engines per year and employ 500 people.

The Volkwagen concern will invest 250 million euros in the new plant, which will cover an area of 30,000 square metres. Starting in 2015, the plant will manufacture engines for the Kaluga car assembly plant and the contract assembly line of a GAZ plant in Nizhny Novgorod.  The manufacturing process will include the mechanical processing of the engine block, the processing of cylinder heads, the assembly and processing of crankshaft, and the assembly of the entire engine.

The plant's construction will allow Volkswagen to expand its production capacities in Russia and also meet the conditions of the additional industrial assembly agreement signed in May 2011. According to the agreement, 30% of vehicles assembled in Russia must be equipped with Russian-made engines as of 2016. The ceremony to open construction at the plant will take place on 11 December 2012.