Mazda and Sollers Form JV for Russia image

Mazda and Russian automaker Sollers plan to set up a joint venture to produce vehicles for Russia.

Mazda declared that initial annual production will be 50,000 units when the plant will begin operations in autumn this year and will reach 70,000 units in 2013. Financial details on the venture were not disclosed. The facility is to manufacture Mazda’s CX-5 SUV, the next-generation Mazda6 car and a Sollers brand vehicle for sale in Russia.

Last year the company sold around 40,000 units in this country, an year-on-year rise of about 60%, which made Russia the company’s second-largest market in Europe. Sales in Russia are expected to grow around 6% in 2012 to 2.8 million units, with the market seen reaching 4 million vehicles by 2015.

To take advantage of government incentives to boost local production, Sollers has entered similar ventures with other automakers recently including Ford and Fiat. Mazda produces more than 70% of its cars in Japan and exports more than three-quarters, trying to boost its overseas output capacity to make its profits less dependent on yen exchange rates. Mazda also plans to build a factory in Mexico and is also working to lift its output in China.