Russia: Ford inaugurates $275 million engine factory image

Ford Sollers, the second largest US carmaker’s Russian joint venture, has recently opened a $275 million engine facility, in a bid to lower the dependence of locally built vehicles on imported parts and currency swings.

The company intends to withstand the rigors coming from the current market collapse and have 60 percent of the total cost of manufacturing autos for the local market spent in the country itself by the turn of the decade in order to gain access to incentives such as decreased import taxes on parts and other components. The new factory has been opened Thursday in the republic of Tatarstan, with an yearly production output capacity of 105,000 engines – and also has the option to expand that quota to 200,000 units, according to a statement released by the joint venture, Ford Sollers. The automaker, without specifying a timetable, has announced that it aims for more than 30 percent of the locally-manufactured Ford autos, such as the Fiesta, Focus and EcoSport to have under the hood the locally sourced engines. The company currently imports all engines into the country.

“Our main target in line with our long-term localization strategy was to launch engine production with a significant level of localization … We are fully committed to this strategy which is key for our business in the current environment,” commented Adil Shirinov, Ford Sollers’ Chief Operating Officer.

The Russian auto market, tipped to overcome the German one to be the European continent’s largest, ended years of double digit growth last year when it crashed – the economy collapsed, the local currency fell the record lows and the weak oil prices and western sanctions over the implication in Ukraine heightened the troubles.

Via Reuters