Ford,Sollers create JV in Russia
Eager to expand sales in emerging markets, Ford Motor Co. planning a 50-50 joint venture with Sollers, one of Russia's leading automotive companies The proposed Ford Sollers joint venture will manufacture and distribute Ford passenger cars and light-duty commercialFord and Sollers local production facilities in the St. Petersburg region and in the Republic of Tatarstan.
"We are delighted to be taking this next step for Ford in Russia with our proposed partner, Sollers," said Stephen Odell, chairman and CEO, Ford of Europe. "This is a great opportunity, and will provide Ford customers in Russia with more products and better service.
"The benefits provided by the proposed joint venture and the new Industrial Assembly policy will be key enablers to build the Ford brand in Russia and create a profitably growing business. It also will help to strengthen the Russian automotive industry and its local supply base," Odell added.
"We are inspired by the opportunity to work with Ford," said Vadim Shvetsov, general director of Sollers.
"We are confident that our mutual efforts on the development of manufacturing facilities, new product launches and localization of parts content will ensure success for our strategy, and a leading position for the future joint venture company on the Russian market," Shvetsov said.
In 2002, Ford became the first foreign auto manufacturer to start producing cars in Russia, and since then it has built a solid base in the country.
Sollers, the second largest producer of passenger and light commercial vehicles in Russia, has considerable experience in the Russian automotive industry. Ford's Russian partner will support the proposed joint venture through its manufacturing capabilities, knowledge of the Russian market, experience in distribution and working with the Russian supply base. This significant contribution will strengthen the proposed joint venture strategy and be important for its future success, Ford officials said.
“We believe the partnership will benefit from blending Ford's distribution channels with Sollers' manufacturing plants and local experience and connections. While it is not clear what start up costs will be, we believe Ford will benefit from increased presence in the expanding Russian auto market. J.D. Powers, like S&P, an independent unit of the McGraw-Hill Companies, forecasts the Russian auto market to rise 6 percent in '11 and will exceed Germany's large market before decade-end,” said Efraim Levy, Standard & Poors automotive analyst.