Having inked a memorandum of understanding, Ford and seasoned Russian automaking group Sollers plan to establish a 50-50 joint venture in Russia with operations under way by the end of the year.

The proposed joint venture called Ford Sollers will manufacture and distribute Ford vehicles using both companies’ local production facilities in St Petersburg (where Ford has assembled models like the Focus and Mondeo since 2002) and in the Republic of Tatarstan where Sollers assembles UAZ, Fiat and Ssangyong models.

Both parties have submitted a joint application to the Russian government for participation in the new Industrial Assembly policy framework which, among other things, limits the number of SKD kits that any one automaker can assemble in a year.

“The benefits provided by the proposed joint venture and the new Industrial Assembly policy will be key enablers to build the Ford brand in Russia and create a profitably growing business. It also will help to strengthen the Russian automotive industry and its local supply base,” Ford Europe chief Stephen Odell said in a statement.

Ford said it was contributing its manufacturing experience, an extensive existing dealer network, and a strong reputation among Russian customers to the proposed joint venture. 

Sollers, the second largest producer of passenger and light commercial vehicles in Russia, has considerable experience in the local automotive industry. It will support the JV with manufacturing capabilities, knowledge of the Russian market, experience in distribution and working with the Russian supply base.

The JV will also produce engines, operate a stamping facility that will boost local parts content for Ford vehicles built in Russia and establish research and development activities. It also will import and distribute Ford brand products.