Fiat will sign an agreement to build a major new car factory in the Russian city of St. Petersburg during the first quarter of 2012.
The announcement was made on Wednesday by a local government official. “The decision has been made for Fiat to build a plant. Fiat has found a serious Russian partner. It will be a modern factory with a large volume of production,” Alexei Chichkanov, chairman of the Committee on Investments and Strategic Projects in St. Petersburg was quoted as saying by moscowtimes.com.
The official didn’t reveal the name of Fiat’s partner, but two sources familiar with the negotiations said it was state lender Sberbank. Fiat is stepping up investment in the fast-growing Russian car market but, unlike Renault, Ford and General Motors, which have struck partnership agreements with local players to meet the state requirement of 350,000 vehicles a year, the Italian carmaker will do it alone. Earlier this year, Fiat’s provisional deal with Sollers fell, with the latter teaming up with Ford.
Car sales in Russia are expected to grow 12 percent next year, according to the Association of European Businesses, down from a previous forecast of 36 percent. However, the market should reach pre-crisis levels in 2012.