St. Petersburg’s deputy governor says Fiat may delay plant in the region

Article by Anita Panait, on October 3, 2012

Fiat may postpone the construction of a plant in St. Petersburg, Russia, as is it still reeling from the excess capacity in Europe, a Russian official disclosed. Fiat has plans to open a EUR850 million ($1 billion) plant in 2013 that could produce up to 120,000 units annually, according to Sergey Vyazalov, St. Petersburg's deputy governor.

Fiat, however, has not contacted the regional administration for three months and has not presented an investment plan, Vyazalov said. St. Petersburg's deputy governor remarked that Fiat has enough capacity in Europe to deliver cars to the Russian market, leading him to expect that the Italian carmaker will delay the factory project several years. 

Fiat chief executive Sergio Marchionne disclosed on Sept. 28 in Paris that Fiat is working on a strategy to expand in Russia and is defining details with Russian banks. Marchionne remarked that there is a “boom” in the Russian market, and Fiat made the right choice to enter it with its Jeep brand.

According to the Moscow-based Association of European Business, new-car sales in Russia soared 15 percent to 1.9 million in the first eight months of 2012 compared to the same period in 2011. Although Fiat brand sales slid 74 percent to 5,054 units, the Jeep brand sales tripled to 2,957 units.

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