Fiat SpA and Russian state bank OAO Sberbank (SBER.RS) have agreed to form a new joint-venture that will produce and sell Jeep-branded cars in Russia, Italian newspaper Corriere della Sera reports without citing sources.
The paper said Fiat will own 80 percent of the joint-venture, while Sberbank will own the remaining 20 percent.
A Russian official said in December that Fiat would sign an agreement to build a major new car plant in St Petersburg during the first quarter of 2012. Two sources familiar with the negotiations had identified the partner as state lender Sberbank.
The joint venture will operate two factories. They will invest EUR850 million in the first one near St. Petersburg where it will eventually produce 120, 000 vehicles a year.
The second factory will be near Moscow, where the luxury Zil cars for Kremlin officials used to be made.
Russian car sales are expected to grow modestly in 2012 as uncertainty caused by the euro zone crisis threatens economic growth and consumer spending in an emerging market that western carmakers are increasingly depending on to drive global sales.
Car sales totalled 2.65 million units in 2011, up from a forecast of 2.6 million.
However, Russia may become Europe’s largest automobile market by the end of this decade, reaching 4 million vehicles a year, provided “global growth can overcome the present uncertainty,” Mark Ovenden, the committee’s deputy chairman, said in the statement.