Italy's Fiat can't find its place in Russia

Fiat is desperately looking for its place in Russia. The Italian car maker was originally going to build its plant in Nizhni Novgorod, but the plans didn't materialize. The Italians would like to settle in St. Petersburg, but Sberbank, the possible creditor of Fiat's project in Russia, offered to set up the automotive production in the Republic of Karachay-Cherkessia.

It has been reported recently that Italy's Fiat agreed to launch the production on special conditions. In accordance with the agreement signed with the Ministry for Economic Development, the volume of investments is to make up $1.1 billion. The funds will be used to organize the assembly production with the capacity of up to 120,000 cars a year. The agreement also stipulates the construction of an engine-making plant.

The new industrial assembly regime that has been introduced this year stipulates the minimum output of 300,000 cars a year for a new plant. The number is a bit larger for the enterprises that already operate - 350,000 cars.

The new agreements cover the period of eight years. During this period of time, investors undertake to take the level of localization of all car models up to 60 percent.

The agreements were signed with Sollers-Ford consortium ($1.2 billion of investments), with Volkswagen AG ($900 million), General Motors ($1 billion) and AvtoVAZ-Renault-Nissan-IzhAvto-KamAZ-Mercedes consortium (total investments - $2 billion).

Such companies as Nissan, Toyota and GM already operate on the outskirts of St. Petersburg. The Italians also hoped to sign the agreement with Russian car maker GAZ for the industrial assembly of Fiat. However, the group has already agreed to assemble 110,000 cars a year with Volkswagen and 30,000 cars with GM.

The Germans will be assembling Skoda Yeti and Oktavia, as well as Volkswagen Yetta in Nizhni Novgorod. As for GM, the company is going to assemble a new generation of Chevrolet Aveo from the middle of next year.

Derways produces the following Chinese models in the city of Cherkessk: Haima 3, Geely MK, Lifan Smily and Lifan 620 and 320. Until the end of this year, the company plans to establish the production of two more models of China's FAW Group. Most likely, it goes about the production of Besturn and Vita.

Hyundai Motors is also in talks about the assembly of light commercial vehicles in Cherkessk.

Sberbank Capital owns the control shareholding of the enterprise. The shareholding was received in exchange for the loan of 1 billion rubles last year.

Vladimir Shabanov.

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Author`s name Dmitry Sudakov