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No decision on sale of Volkswagen's last Russian factory, says govt

FILE PHOTO: A Volkswagen logo is pictured in a production line at the Volkswagen plant in Wolfsburg

(Reuters) -Russia's industry ministry said on Wednesday no decision had yet been made on the sale of Volkswagen's last asset in Russia, after a report that autodealer group Avilon was set to buy Volkswagen's factory in the city of Kaluga, south of Moscow.

The Moscow-based RBC daily reported that Avilon was set to buy the factory, citing two unidentified sources. The newspaper cited one source as saying the deal was already agreed, and would be finalised on March 3, the date of the carmaker's supervisory board meeting.

A source close to the matter told Reuters there are two contenders to purchase the plant - Avilon and Russian conglomerate AFK Sistema, which Kommersant reported last month was also considering buying the asset.

Volkswagen said it was considering various scenarios, including the option of selling Volkswagen Group Russia's assets to a third party, but that a decision had not yet been made.

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"The final decision is at the stage of formation," the Russian Ministry of Industry and Trade said, adding that selling the assets to a third party was an option.

Avilon did not respond to requests for comment.

Volkswagen opened the Kaluga factory, which has capacity of 225,000 vehicles a year, in 2007. The plant has been furloughed since March 2022, when sanctions imposed by Western countries over the conflict in Ukraine saw supply chains break down.

A string of Western car brands have quit the Russian market in the year since Moscow sent troops into Ukraine, either suspending production or selling their assets in the country to local buyers.

(Reporting by Reuters; Editing by Mark Potter and Jan Harvey)