Fiat and Russia's Sberbank have inked a letter of intent for a joint venture that will manufacture and market Jeep-branded vehicles in the nation, according to a report by Italian newspaper Corriere della Sera. Fiat and its U.S. affiliate Chrysler Group are seeking to expand into Russia and other fast-growing emerging markets to counteract the slow growth in the European region.
In the joint venture, Fiat would have 80% ownership, the Italian paper disclosed without citing sources. On the other hand, Sberbank will finance the project by providing a credit line to the partnership, the paper further reported. In December, a Russian official revealed that Fiat would enter into a deal to manufacture a major new vehicle factory in St Petersburg during the first quarter of this year.
Two people who are familiar with the discussions had named the partner as state lender Sberbank. Fiat made no comment on the matter. Corriere further reported that the joint venture would spend 850 million euros or $1.14 billion in the St. Petersburg facility, which would manufacture 120,000 vehicles annually. It also revealed that a second facility would be opened in Moscow.