Fiat has signed Russia’s biggest ever car joint venture deal with domestic producer Sollers, pledging up to EUR210m (US$289.6m) in intellectual property and committing to boost production to 500,000 cars a year, while Daimler is becoming more involved with truckmaker Kamaz.
Those volumes, compared to Sollers’ output of 62,000 cars in 2009, would be more than a third of Russia’s total car sales last year, when a near halving in demand caused by the global economic slowdown sent the industry crashing, Reuters noted.
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On Thursday, Fiat predicted Russia would sell 3.4m cars by 2016, up from the credit crunch 1.47m last year, although latest figures do not show any sign the crisis is ending, with new car sales down 37% in January.
Meanwhile, Daimler said it would strengthen its ties with truckmaker KAMAZ, upping its stake to 11% from 10% and bringing in the European Bank for Reconstruction and Development (EBRD) to pick up another 4% stake.
Both stakes were bought from Moscow investment bank Troika Dialog for an undisclosed sum.
“This is not only a strategically important step for Daimler Trucks, especially under the currently difficult economic conditions, it also sends a clear signal,” said Daimler board member Andreas Renschler, adding that the Russian market had major growth opportunities.
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By GlobalDataRussian prime minister Vladimir Putin said the state would throw its support behind the partnerships, pledging to back the Fiat-Sollers deal with EUR2.1bn ($2.76bn) in subsidised loans from state-controlled banks for up to 15 years, effectively bankrolling the group’s development.
Vladimir Dmitriev, the chief executive of state bank VEB, who was also present at the signing, told Reuters “there is a chance” VEB would lead the lending consortium, but that final interest rates were still under discussion.
Fiat and Sollers said in a presentation that a financial partner could come into the venture at a later date.
The alliance will be the third of its kind for the Russian car industry, after Renault bought 25% of Russia’s largest carmaker AvtoVAZ in 2007/09, while Daimler bought its original stake in Kamaz in late 2008.
AvtoVAZ had to be rescued with around $1bn of state aid while even the relatively strong Kamaz said it may struggle to survive without government help.
