Vladimir Dmitriev, the CEO of Russia’s state development bank VEB, told journalists that the bank is ready to invest in a joint venture between the Russian carmaker Sollers and Ford Motor Co., but he clarified that the bank does not yet have a deal with the partners.
Sollers recently said it had dropped a joint venture project with Fiat S.p.A. and instead would team up with Ford as the U.S. car maker seeks to increase its presence in the booming Russian market.
Russia’s Kommersant daily said that Ford and Sollers plan to take out a 10-year loan for $1.2 billion, with two thirds of interest payments subsidized by the government. Boston Consulting Group said that Russia will be the sixth-largest global auto market by 2020 with annual sales of 4 million units, up from its current 10th position.
The consultancy added that Russia may surpass Germany by 2018 as the largest market for passenger cars and light commercial vehicles in Europe.
Sollers and Ford plan to build local production facilities in Vsevolozhsk in the St. Petersburg region and in Tatarstan to build Ford passenger cars and light commercial vehicles.
Stephen Odell, Ford of Europe’s CEO, said that the proposed joint venture will help build the Ford brand in Russia and create a profitably growing business, adding that the venture will “help to strengthen the Russian automotive industry and its local supply base.” [via autonews - sub. required]