NEW YORK — Ford Motor Co. plans to team up with a Russian automaker to make and distribute cars in the country. The announcement came shortly after Italian automaker Fiat SpA backed out of a potential partnership with the same Russian company. Fiat and Russian automaker Sollers had signed a memorandum of understanding last year to produce up to 500,000 vehicles a year in Russia in a bid to become the country’s second-largest car maker.
The two companies said in a joint statement Friday that they would “pursue independent strategies.” Fiat owns U.S. automaker Chrysler. Following the Fiat announcement, Ford and Sollers disclosed they had signed a memorandum of understanding.
The companies said they will have equal stakes in their Russian joint venture called Ford Sollers. Ford’s stock gained 13 cents to US$16.10 in premarket trading on Friday. Local plants in the St. Petersburg region and the Republic of Tatarstan will make Ford passenger cars and light commercial vehicles as well as engines. The venture will also run a stamping facility that will provide local parts for Ford vehicles made in Russia, create research and development activities and import and distribute Ford products, parts and accessories in Russia. Financial terms of the deal weren’t disclosed. The joint venture, which is expected to start operations by year’s end, will help strengthen Russia’s auto industry and its local supply base, Stephen Odell, Chairman and CEO of Ford of Europe, said in the statement. Russia has poured millions of rubles into its stagnant domestic car industry over the past decade in an attempt to resuscitate it. Last year, the government announced that the Russian car industry would survive only in partnership with global players.