The opening ceremony in Tenth of Ramadan City, 60 kilometers northeast of Cairo, was attended by Boris Alyoshin, the head of the Russian Federal Industry Agency, and the Egyptian foreign trade and industry minister.
Hundreds of production workers, Russian diplomats, and representatives of Lada's Russian creator Avtovaz and its Egyptian partner Lada-Egypt, also gathered near the plant for the ceremony.
The news company will assemble Lada 2107 and 2110 sedans.
The production of Lada 2107 in Egypt begun in 2002 at the Suzuki plant, and the production of Lada 2110 started in December 2005. Some 5,000 cars have been manufactured at the plant over the past three and a half years.
The new joint venture will put out 3,300 cars annually.
Alyoshin told a news conference in Cairo earlier that the new production facility was the first sign of rapidly developing cooperation between Russia and Egypt. He said free trade zones could be created with Egypt.
