Ford forms venture with Russian firm

The Detroit News - Ford Motor Co. and its Russian partner Sollers OJSC formed a new venture Wednesday that will make the Transit commercial van and other Ford vehicles in Russia.

Prime Minister Vladimir Putin was on hand for a signing ceremony in Moscow establishing the Ford Sollers venture.

"Russia is set to become Europe's largest market for new vehicles by mid-decade and provides the Ford brand a huge growth opportunity," said Stephen Odell, chairman and chief executive of Ford of Europe.

Ford expects to generate the bulk of its sales growth in coming years in fast-growing emerging markets such as Russia. The Dearborn automaker said Tuesday that it expects to increase global sales by about 50 percent to 8 million vehicles by the middle of the decade. Demand for vehicles is rising this year in Russia, buoyed by high raw materials prices that are helping its economy.

The Association of European Businesses recently raised its forecast for Russian new car sales to 2.35 million this year, up from a previous estimate of 2.24 million, after April car sales surged 42 percent.

The 50-50 Ford Sollers venture is expected to begin producing vehicles this year.

Vadim Shvetsov, general director of Sollers, called the partnership with Ford "a vital step in the development of Sollers."

Ford Sollers operations will include Ford's assembly plant near St. Petersburg that builds the Ford Focus and Mondeo cars, and two Sollers production facilities in the Republic of Tatarstan. Ford and Sollers also signed a letter of intent with Vnesheconombank for financing for Ford Sollers of 39 billion Russian roubles, or around $1.4 billion.