Fiat and Russian steel maker Severstal have agreed to boost strategic co-operation after initial deals were reached earlier this year, Italy's biggest industrial group said on Friday, according to Reuters.

"Considering the Russian economy's great potential, the two companies agree to jointly explore feasibility of different projects in Russia in all areas of the Fiat group's industrial activity," Fiat reportedly said in a statement.

Reuters noted that, earlier this year, the two firms struck a deal for Severstal's auto arm in Russia to assemble Fiat's Albea, Palio and Doblo models. Under the deal, Severstal also imports and sells Fiat cars in Russia.

A Severstal executive reportedly said in January that one of the main objectives for buying 70% of Italian steel maker Lucchini was to gain a foothold to sell steel products to Italy's carmakers.