Magna International plans to build three new auto parts plants in Russia.
The news comes from MI Developments, a real estate company spun off from Magna International in 2003, headed by former Liberal MP Dennis Mills.
Magna has been looking at Russia as a growth market for some time. In March, Magna co-CEO Don Walker told a New York automotive conference, "We've been steadily trying to move our manufacturing footprint into low-cost regions," and stated his intention to build 16 new plants in the next three years.
The company had been exploring auto assembly partnerships with Chrysler in Russia last year. But the Russian facilities announced Wednesday would make only auto parts, said MI Developments CFO Richard Smith.
Two plants would be located in the St. Petersburg area and one would be in Kaluga, two hours south of Moscow. They would be Magna's first manufacturing operations in Russia.
Magna has brought on Wolfgang Bernhard, former chief operating officer of Chrysler, to work as a consultant, reportedly focusing on Magna's Russia strategy.
Russian billionaire Oleg Deripaska once owned 20 per cent of Magna, but sold his shares last October during the financial crisis.
Magna's connections to Russia also extend to its bid for General Motors' European operations, Opel, in which Russian bank Sberbank would get a 35-per-cent stake. Fiat and Chinese auto maker Beijing Automotive are also in the running to take over Opel.
Mr. Smith referred questions about the acquisition of land in Russia to Magna. "There are some specific regulatory hurdles and structures that need to be respected" with regards to completing transactions in Russia, he said.
