Fiat planning to launch production of SUVs in Russia

Article by Christian Andrei, on August 26, 2010

At a contract signing event between Fiat's U.S. subsidiary Case New Holland Inc. and Kamaz , Russia 's largest truck maker, for a venture to produce and sell agricultural and construction machinery, Fiat S.p.A. CEO Sergio Marchionne made a meaningful revelation. He said that Fiat wants to soon produce SUVs in Russia .

Marchionne, who was in Moscow to sign the deal, said, "Our dream is to make a jeep in Russia ." Fiat controls U.S. automaker Chrysler Group, which produces the Jeep Grand Cherokee SUV among others.

Russian Prime Minister Vladimir Putin also attended the contract signing. Putin had been vocal about Italy being one of Russia 's most important trade partners and so it's no surprise that he supports the plan.

Putin told Marchionne that making an SUV in Russia would be a good move. In particular, Putin said that SUVs are in demand in Russia even when it has yet to build many roads. 

Fiat actually already has an agreement with Russian automaker Sollers to produce small- and medium-sized Fiat cars. But Fiat intends to further develop its partnership with Sollers, which like the rest of the carmakers worldwide, has recorded a drastic drop in sales after having been hit by the economic crisis.

Incomes had shrunk and cheap car loans had disappeared altogether. In fact, Russia car sales decreased by more than 50% in the first nine months of 2009. A recovery is not expected before the end of 2009.

Topics: fiat, russia, production

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