Ford will start building European-designed Mondeo cars in 2007 and add the Maverick (Escape) sport utility line later at its Russian plant, Dmitry Levchenkov, deputy director of the Economic Development and Trade Ministry’s investment policy department, told Prime-Tass on Friday.

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The plant in Vsevolzhsk in the Leningrad Region, currently produces the European Focus model line.


Levchenkov also said that Ford was expected to sign an agreement by 1 August on switching to “industrial assembly” status for its plant from the current “free customs warehouse” status.


Under the “free customs warehouse” regime, automakers import auto components duty-free but have to increase the share of domestic costs in total production costs, the report said.


Ford, which signed an assembly agreement with the Russian government in 1999, was expected to increase the share of domestic costs in Russia to 40% of its production costs by May 2006 and to 50% of its production costs by 2007.

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Under the “industrial assembly” conditions, which were introduced in early 2005, auto producers either import components duty-free or pay a 3% duty. Under these conditions, an automaker is required to decrease the value of components imported duty free by either paying higher customs duties four and a half years after the launch of the assembly project or by increasing the share of domestic components within that period.


The Russian government may add 60 positions to a list of auto components imported to Russia duty-free by auto makers operating under the so-called “industrial assembly” status, Economic Development and Trade Minister German Gref said, also on Friday.


“This policy will help attract billions of rubles in additional investments,” Gref said speaking during a visit to Russian car maker IzhAvto in Izhevsk in the constituent Russian republic of Udmurtia.