Fiat expected to open plant in Russia to produce Jeep models by the end of 2012

Article by Christian Andrei, on October 15, 2012

Fiat is expected to finalize a deal to open a plant in Russia to produce Jeep models by the end of 2012, according to sources. The factory will be situated near St. Petersburg. In early October, Russian authorities became worried that Fiat would postpone plans to invest 850 million-euro ($1 billion) in a plant since the sales slump in Europe has freed up capacity that could be exported to Russia.

Last Saturday, Fiat-Chrysler CEO Sergio Marchionne said that he is really keen on making this Russian expansion happen and also that they’re closing the deal soon. It’s estimated that this plant could produce 120,000 units annually and is likely to begin production in 2014. The Moscow-based Association for European Businesses said that the auto market in Russia is quickly growing with sales likely to increase by 7.5% to 2.85 million this year.

From January to September of this year, Jeep sales in Russia more than doubled to 3,455 vehicles. Meanwhile, the demand for Fiat cars fell by 72% to 6,263 cars. Heavy investments have been made by Western automakers such as General Motors, Ford Motor and Renault in Russia to benefit from a market that is predicted to soon become bigger than Germany’s this decade.

Topics: fiat, russia

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