Ford Motor Company and Sollers OJSC have signed agreements to establish a 50-50-owned joint venture in Russia. The new business, named Ford Sollers, is scheduled to start operations later this year.

Stephen Odell, chairman and CEO of Ford of Europe, and Vadim Shvetsov, general director of Sollers, signed the final agreement papers at a ceremony held in Moscow with Russian Prime Minister Vladimir Putin.

Ford and Sollers also signed a Letter of Intent with Vnesheconombank (VEB), the Russian development bank, for long-term financing for Ford Sollers of 39 billion Russian roubles, or approximately US$1.4bn.

The new joint venture also announced the Ford Transit medium commercial vehicle will be among several new Ford products to be built by Ford Sollers.

“This is an historic day for the Ford brand in Russia,” Stephen Odell said. “Together with our friends and partners at Sollers, we have established the new Ford Sollers business with the clear objective of providing our customers with more Ford products and increased service in the Russian market.

“Russia is set to become Europe’s largest market for new vehicles by mid-decade and provides the Ford brand a huge growth opportunity. Ford Sollers will help to build the Ford brand in Russia and support profitable growth, while also strengthening the Russian automotive industry and its local supply base,” said Odell.

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“We are delighted to work with Ford, and this partnership is a vital step in the development of Sollers,” said Vadim Shvetsov. “We are confident that our mutual efforts on the development of manufacturing facilities, new product launches and localisation of parts content will ensure success for our strategy and a leading position for the Ford Sollers joint venture company in the Russian market.”

Ford Sollers operations will include the Ford manufacturing plant in Vsevolozhsk, near St. Petersburg, which currently builds the Ford Focus and Ford Mondeo, in addition to two Sollers production facilities in the Republic of Tatarstan. Together, these three plants will manufacture a range of Ford passenger cars and light commercial vehicles, including the Ford Transit commercial vehicle.

In addition to the vehicles Ford Sollers will build in Russia, the joint venture will have access to the global range of Ford’s latest products delivered under its One Ford plan.

Sollers, Russia’s second-largest producer of passenger and light commercial vehicles, will support Ford Sollers through its manufacturing capabilities, knowledge of the Russian market, experience in distribution and work with the Russian supply base. This significant contribution will strengthen Ford Sollers, and will be an important contributor to its future success.

Ford Sollers will be responsible for the import and distribution of Ford brand products, parts and accessories in Russia. In addition to vehicle production, Ford Sollers will produce engines, operate a stamping facility providing a higher level of local parts content for Ford vehicles built in Russia, and establish local research and development activities.

The joint application by Ford and Sollers to the Russian government for participation in the new industrial assembly regime was approved by the Ministry of Economic Development and Trade on June 1, 2011. Ford Sollers will begin formal operation later this year.