Sojitz Corporation, Isuzu Motors Ltd and OJSC Severstal-Auto (SSA) have agreed to set up a joint venture closed joint stock company Severstalauto-Isuzu to manufacture and sell Isuzu trucks in Russia.

The three companies had signed a contract to collaborate on commercial automotive venture on 30 July in Moscow, being located in Russia''s in Yelabuga, Republic of Tatarstan. The plant will begin full-fledged sales activities with the start of production in June 2008.

Since July 2006, Isuzu Motors has shipped semi-knocked down (SKD) kits, supplied by Sojitz, for its ELF light-duty trucks to SSA, which assembled and sold them through its subsidiary OAO Ulyanovsky Avtomobilny Zavod.

The steady rise in sales volume has weighed in favour of the two companies setting up the new joint venture to support additional sales. The new company will handle imports of SKD kits from Japan, SKD assembly, and sales of trucks to dealers in Russia.

It has a production and sales target of 5,000 units a year for the time being, with volume expected to top 30,000 units as Russia''s demand for trucks increases in the future.