FRANKFURT -- Volkswagen said on Thursday it would start building VW brand cars in Ukraine this summer as part of a bid to double its sales in the country in the medium term.
Volkswagen said it had signed a declaration of intent to start assembling Passat, Golf, Bora and Polo models in Ukraine, where it sold around 3,000 VW brand cars last year, half as many again as in the previous year.
"Ukraine is an attractive market for Volkswagen given the overall market developments there over the past three years," the company said in a statement, adding that the VW brand was currently the third most popular car import in the country.
A Volkswagen spokesman said the cars built in Ukraine would be for the local market, and said it was too early to give any production volume targets or say whether the plan would create new jobs.
Unlike key French rival PSA Peugeot-Citroen, which has recently said it will build more cars in Eastern Europe, Volkswagen still builds most of its own brand cars in Germany where labor costs are higher.
As mature markets in Western Europe and the United States stagnate, carmakers are increasingly looking to emerging markets in Eastern Europe and beyond for sales growth.
Industry experts predict car sales will double within the next five years in central and Eastern Europe, although they still lack the volume needed to support a big increase in high-volume production.