Ford and Sollors Launch A 50:50 Joint Venture
Ford Motor Company (NYSE:F) and Russian auto company Sollors has signed a 50:50-owned joint venture. Ford Sollors will be manufacturing and distribute Ford vehicles in Russia. This joint venture includes the local production facilities in the St. Petersburg region and in the Republic of Tatarstan. Below is the press release:
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Ford and Sollers Sign a Memorandum of Understanding to Establish a Joint Venture in Russia
MOSCOW, Feb. 18, 2011 /PRNewswire/ —
* Ford and Sollers plan to launch a 50:50-owned joint venture in Russia
* The proposed joint venture called Ford Sollers will manufacture and distribute Ford vehicles in the country
* Joint venture will include Ford and Sollers local production facilities in the St. Petersburg region and in the Republic of Tatarstan
* Ford Sollers will manufacture a range of Ford passenger cars and light commercial vehicles and is expected to start operations by the end of this year
* Ford and Sollers have submitted a joint application to the Russian government for participation in the new Industrial Assembly policy framework
Ford Motor Company (NYSE: F) and Sollers OJSC today signed a Memorandum of Understanding under which the parties intend to launch a new 50:50-owned joint venture called Ford Sollers for the production and distribution of Ford vehicles in Russia.
“We are delighted to be taking this next step for Ford in Russia with our proposed partner, Sollers,” said Stephen Odell, chairman and CEO, Ford of Europe. “This is a great opportunity, and will provide Ford customers in Russia with more products and better service.
“The benefits provided by the proposed joint venture and the new Industrial Assembly policy will be key enablers to build the Ford brand in Russia and create a profitably growing business. It also will help to strengthen the Russian automotive industry and its local supply base,” Odell added.
“We are inspired by the opportunity to work with Ford,” said Vadim Shvetsov, general director of Sollers. “We are confident that our mutual efforts on the development of manufacturing facilities, new product launches and localization of parts content will ensure success for our strategy, and a leading position for the future joint venture company on the Russian market.”
The proposed joint venture will include Ford and Sollers local production facilities in Vsevolozhsk (St. Petersburg region) and in the Republic of Tatarstan, and will manufacture a range of Ford passenger cars and light commercial vehicles.
In 2002, Ford became the first foreign auto manufacturer to start producing cars in Russia, and since then it has built a solid base in the country. Ford brings to the proposed joint venture its manufacturing experience, an extensive existing dealer network, and a strong reputation among Russian customers as a brand that sells great products in the Russian market. The proposed joint venture will have access to the global range of Ford’s latest products delivered under its One Ford plan.
Sollers, the second largest producer of passenger and light commercial vehicles in Russia, has considerable experience in the Russian automotive industry. It will support the proposed joint venture through its manufacturing capabilities, knowledge of the Russian market, experience in distribution and working with the Russian supply base. This significant contribution will strengthen the proposed joint venture strategy and be important for its future success.
In addition to vehicle production, the Ford Sollers proposed joint venture will produce engines; operate a stamping facility that will provide a higher level of local parts content for Ford vehicles built in Russia; and establish research and development activities. It also will be responsible for the import and distribution of Ford brand products, parts and accessories in Russia.
Ford Sollers is scheduled to start operations by the end of this year. In order to benefit from the new Russian automotive policy framework, Ford and Sollers have made a joint application to the Russian government for participation in the new Industrial Assembly regime.
About Ford Motor Company
Ford Motor Company, a global automotive industry leader based in Dearborn, Mich., manufactures or distributes automobiles across six continents. With about 164,000 employees and about 70 plants worldwide, the company’s automotive brands include Ford and Lincoln. The company provides financial services through Ford Motor Credit Company. For more information regarding Ford’s products, please visit www.fordmotorcompany.com.
Ford of Europe is responsible for producing, selling and servicing Ford brand vehicles in 51 individual markets and employs approximately 66,000 employees. In addition to Ford Motor Credit Company, Ford of Europe operations include Ford Customer Service Division and 22 manufacturing facilities, including joint ventures. The first Ford cars were shipped to Europe in 1903 – the same year Ford Motor Company was founded. European production started in 1911.
Sollers OJSC (www.sollers-auto.com ) is one of Russia’s leading automotive companies, engaged in the production, distribution and servicing of passenger cars and commercial vehicles under its own brands and in cooperation with international OEMs in Russia. Sollers owns five automotive plants, engine production facility, Sollers-Finance Company, and a number of dealerships in Russia with more than 20,000 employees. In 2010, Sollers became the second largest Russian producer of passenger and light commercial vehicles, with total sales of 98,000 units.