Italian car major Fiat SpA has signed a 2.4 billion euro ($3.3 billion) joint venture with Russian automobile company Sollers on Thursday to create the biggest car maker in Russia, Itar-Tass news agency reported yesterday.
The agreement signed by Fiat CEO Sergio Marchionne and Sollers director general Vadim Shvetsov in the presence of Russian prime minister Vladimir Putin at Sollers' assembly plant in Tartastan, 1,000 kilometres east of Moscow, envisages to make 500,000 vehicles a year.
|Fiat CEO Sergio Marchionne |
''This year, we'll continue the programme of state aid to car production in general, but we're also ready to give special support to this project, including with money from major Russian state-owned banks,'' Putin said.
The plant will assemble the Linea, a car developed by Fiat for emerging countries, and develop and produce new models from Fiat's alliance with Chrysler.
The joint venture will also expand Sollers' existing plant and establish new production facilities and a technology park for producing components.
The plant will be capable of producing up to 500,000 passenger cars and SUVs annually by 2016, with at least 10 per cent of production intended for export, the statement said.
Fiat and Sollers will borrow over two billion euros at subsidised rates for the joint venture.