11 Feb 2010 15:28

Sollers, Fiat sign JV agreement, govt promises support

NABEREZHNYE CHELNY. Feb 11 (Interfax) - Russia's Sollers and Italy's have signed an agreement to form a joint venture that has every chance of becoming Russia's second biggest car producer.

The companies signed a memorandum on the joint venture at a ceremony in Naberezhnye Chelny, Tatarstan, attended by Russian Prime Minister Vladimir Putin.

Sollers chief Vadim Shvetsov and Fiat Sergio Marchionne signed the document.

The joint venture will be capable of producing 500,000 cars per year and achieve that sort of output in 2016. It will produce a range of nine class C and D models as well as off-road and crossovers, six of them based on Fiat-Chrysler platforms. Overall project costs are EUR 2.4 billion.

Putin said at a meeting with the joint venture's management that the government is pledging state support for the joint venture, and that the Industry and Trade Ministry has drafted a request for financial support.

The government will "lend its shoulder to the joint project, including by involving the largest government-related banks," Putin said.

The government has given instructions to consider a 15-year loan of EUR 2.1 billion for the joint venture, Putin said.

He said the joint venture would budget more than EUR 1 billion for new equipment, EUR 600 million of which would be spent on Italian equipment.