Sollers and Ford to invest $1.4 bln in Russian JV
MOSCOW. Feb 22 (Interfax) - Sollers Group and Ford Motor Company plan to earmark $1.4 billion for a joint venture in Russia, which should be formed by the end of 2011.
The JV plans to produce six new models, including a B+ class sedan (starting in 2014), a updated C class Focus, an updated D class Mondeo, a new Kuga crossover model and the Transit light commercial vehicle, the Russian daily Kommersant reported on Tuesday citing the JV's business plan.
In addition, the Sollers and Ford JV will engage in semi-knock-down assembly of Ford cars: the S-Max and Galaxy, as well as the current generation of Kuga crossovers.
The new sedan and Kuga models will be produced at Sollers' plant in Naberezhnye Chelny and the Explorer and Transit vehicles - in Elabuga. The assembly of Explorer and Transit models will start in 2012. The Kuga will appear in 2013.
The JV's production plan for 2016 foresees the production of 300,000 cars (including Ford's plant in the Leningrad Region, which will be part of the JV).
The JV's investment program until 2020 is estimated at $1.4 billion, including $768 million for the launch of new models, $387 million for production localization and $187 million for engine production. The bulk of the financing will be raised through state assistance. Sollers and Ford hope to receive a 10-year loan facility worth $1.2 billion at a soft rate.
It was earlier reported that Ford and Sollers signed a memorandum for the JV's formation last week.
The JV will be organized on a parity basis. The new company will produce and distribute Ford cars on the Russian market. The JV will include Ford and Sollers' production facilities in the Leningrad region (Vsevolozhsk, Ford's Russian plant) and Tatarstan (in Naberezhnye Chelny and the Alabuga Special Economic Zone). The new JV will produce Ford cars and light commercial vehicles. Operations should start by the end of 2011.