15 Apr 2010 14:03

Udmurtia negotiates use of Izh-Auto facilities with Sollers

IZHEVSK/MOSCOW. April 15 (Interfax) - Sollers and the Udmurtia administration are negotiating the sue of idle production capacity at OJSC Izh-Auto, Udmurt Industry and Energy Minister Oleg Radionov told Interfax on Thursday.

Udmurt President Alexander Volkov has talked with Sollers representatives, who expressed interest in the proposal, Radionov said.

Sollers "expressed interest, but not specific timing or models. That is the topic for discussion now, for further negotiations. We are in the beginning stages of discussing this subject," Radionov said. However, it is the assemblage if Fiat models that is at issue, he said.

Russia's Industry and Trade Ministry has given its political backing to the issue, Radionov said. "I was in contact with the department chief and he confirmed that they support us in principle, support us only politically, but all the agreements [should be] between businesses, that is, between Izh-Auto and Sollers," he said. A hard decision "depends on the board of creditors, and on the main creditor - Sberbank ," he said.

The Sollers press service told Interfax that the group is interested in developing auto-components suppliers to localize production, and that includes Udmurtia.

"Judging from the fact that the new project [with Fiat] will be based on the creation of infrastructure in Naberezhniye Chelny, we think it advisable to concentrate the production of Fiat automobiles in Tatarstan," a Sollers spokesman said. "We are interested in developing producers of automotive components on Udmurt territory."

Sollers, formerly Severstal-Auto, manages the Ulyanovsk Automotive Plant, Zavolzhsky Motor Plant , Sollers-Naberezhniye Chelny, Sollers-Alabuga and Sollers-Far East. The company also has an engine manufacturing joint venture with Fiat Powertrain Technologies. Sollers produces UAZ, Fiat, Isuzu and SsangYong models in Russia.