Ford Replaces Fiat in Joint Venture with Russia's Sollers

Feb. 18, 2011
The joint venture is expected to produce its first cars by the end of 2011 for the Russian market.

Ford stepped in on Feb. 18 to take the place of Fiat in a joint venture with a Russian automobile assembly group that enjoys a strategic foothold on the booming post-Soviet car market. Russia's second-largest auto assembly company Sollers has been the focus of growing international attention after developing a reputation for being a reliable partner for car makers such as South Korea's SsangYong and Japan's Isuzu.

It began producing Fiat cars in 2006 and signed a celebrated framework agreement with the Italian company at a February 2010 ceremony that was attended personally by Prime Minister Vladimir Putin. But the joint venture collapsed on Feb. 18 without an explanation -- and the Russian firm taking only moments to announce a new deal with Ford.

Sollers and Fiat said that they would "pursue independent strategies to further develop their respective presence in Russia."

Their venture had been expected to build up to 500,000 cars per year and lead to investments of 2.4 billion euros (US$3.3 billion) but the Naberezhnye Chelny-based Sollers quickly announced that it had found a new strategic partner in Ford.

Ford became the first foreign auto company to launch its own plant in Russia in 2002 and has been looking to expand its presence in the lucrative post-Soviet market ever since.

Sollers said the joint venture would be called Ford Sollers and focus on "the manufacture and sale of Ford cars in Russia."

The two sides signed only a framework agreement that provided few specifics.

But Ford of Europe CEO Stephen Odell called the joint venture a "great opportunity" that would deliver a boost to both his company and the Russian auto industry.

His Sollers counterpart Vadim Shevtsov said the venture hoped to produce new Ford models and help "localize" them to meet Russia's tastes and climate.

The joint venture is expected to produce its first cars by the end of 2011.

Copyright Agence France-Presse, 2011

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