26.02.2011 FIAT PROPOSES TO GO IT ALONE IN RUSSIA

JEEP COMPASS 2011
FIAT LINEA ABSOLUTE

After two failed attempts to get a joint venture for vehicle production in Russia up and running, Fiat has announced that it is instead to try to establish an operation on its own and has just submitted plans to the state government. Fiat (bottom, Linea) and Jeep (top, the newly facelifted Compass) will be the "mainstay" of the new plans.

After two failed attempts to get a joint venture for vehicle production in Russia up and running, Fiat has announced that it is instead to try to establish an operation on its own and has just submitted plans to the state government.

Just a week ago Russian domestic carmaker Sollers announced that it was jilting Fiat to sign up instead to a joint venture with the Ford Motor Company. Ambitious plans for the Fiat-Sollers joint venture had been announced just over a year ago (on February 12, 2010) which called for the production of 500,000 vehicles in Russia by 2016. The loans were to have been subsidised by the Russian government. That deal in fact came after a previous plan to acquire a stake in the country's largest automaker, Avtovaz, fell through when the Italian firm was outbid by its French rival, Renault.

Instead of seeking a joint venture Fiat now plans to set up its own operation in Russia as it tries to position itself in a quickly growing market. Production targets have been readjusted to 300,000 vehicles a year (although Fiat targets are generally not treated too seriously by industry analysts) and it plans a similar mix of models to that mooted with the Sollers joint venture. Fiat is also keen to establish the Chrysler Group's Jeep brand on the Russian market where it believes its off road products will be ideally suited to consumers' requirements.

"Fiat SpA announces that today it has submitted a Memorandum of Intent to the Ministry of Economic Development of the Russian Federation concerning a project for the localisation of production and distribution of passenger cars and commercial vehicles," read a statement issued by Fiat in Turin yesterday. "The project envisages the establishment of manufacturing capacity for up to 300,000 vehicles per year, in accordance with the requirements of the new motor vehicles industrial assembly regulations established by the Russian Federation.

The product plan would be principally based on production of C and D segment cars, SUVs and light commercial vehicles," the Fiat press release continued. "The Fiat and Jeep brands will be the mainstay of this project, which also envisages the distribution of a limited number of imported vehicles to complete the product range. This plan will be accompanied by a commitment to further expand and strengthen Fiat’s dealer network, which will also provide continuing support and service to all of its current customers."
 

© 2011 Interfuture Media/Italiaspeed