Wednesday, 29 February 2012

Fiat, Sberbank Plan EUR850 Million JV To Build Jeeps In Russia

Fiat SpA will form a joint venture with Russian state bank OAO Sberbank to build cars and vans under Jeep and other brands in a EUR850 million investment, marking the Italian automaker's latest effort to establish a bigger presence in the country's quickly expanding market.

Fiat issued the statement after its chief executive, Sergio Marchionne, announced the signing of the agreement to reporters at an event in Brussels earlier in the day. Marchionne didn't provide any further details.

Fiat said the intention behind the joint venture would be to build vehicles at a plant in St. Petersburg and later in Moscow.The Italian company would have 80% of the venture and Sberbank the remaining 20%.Jeep is a brand owned by Chrysler Group LLC, Fiat's U.S. subsidiary.

t didn't say how much of the EUR850 million would be put up by each partner, nor did it say whether it was earmarked just for the first plant.The letter of intent is the outcome of an initiative by the Russian government to promote direct investment in country's automotive industry.In June 2011, it received proposals from various manufacturers, including Fiat, which had offered to invest $1.1 billion to build two factories.Fiat had previously tried to form a partnership with OAO Sollers. It failed, losing out to Ford Motor Co.


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