Fiat S.p.A. and Sollers announced in Naberezhnye Chelny, Russia, today the establishment of “global alliance,” which initially will include a joint venture for the production of passenger cars and sport utility vehicles.
Vadim Shvetsov, CEO of Sollers and Sergio Marchionne, CEO of FIAT Group, in the presence of Vladimir Putin, the Prime Minister of Russia, signed a memorandum of understanding. Ownership will be split 50%/50%.
Planned production capacity of the new JV will be 500,000 vehicles per year by 2016. Nine new models in the C and D segments and SUVs will be marketed on the Russian market.
Fiat said up to six will be made from a new global compact Fiat-Chrysler platform. Chrysler will receive some of the income for intellectual property rights and the sale of Jeep kits or components.
Sollers already assembles the Fiat Albea car and Ducato van, and has annual sales of about $2 billion.
At least 10% of the produced vehicles will be shipped to export markets.
It was not immediately clear if this includes North America, where Canadian and U.S. taxpayers have bailed out Chrysler.
The Russian auto market has been hit unusually hard by the Great recession, with annual sales running at 1.4 million units, which is down more than 50%.
The factory will be located in Naberezhnye Chelny, about 1,000 Km East of Moscow in the Republic of Tatarstan.
An existing Sollers production site will be expanded, and a technology park added for component production, including engines and transmissions. (more…)