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Business news, 11.02.2009 14:35

Nissan set to open St Petersburg plant in May

nissan Japan's Nissan Motor Co plans to open a car plant in St Petersburg in May, despite the global financial crisis, and has begun testing vehicle assembly there, a city official said on Tuesday.

Japan's third-largest auto maker is building a $200 million factory with an annual capacity of 50,000 cars in Russia's second city, St Petersburg, sometimes referred to as the Russian Detroit because of its booming automotive industry.

"Now the test assembly of cars is going on, the factory opening will be at the end of May," Maxim Sokolov, the head of St Petersburg's committee on investment and strategic projects, told journalists.

Last November, when U.S. automotive giant General Motors launched its first wholly owned Russian factory in St Petersburg, the Nissan project had been expected to start operations this February.

Russia had been poised to become the largest car market in Europe this year, but the global financial crisis has taken its toll, with car sales now expected to fall by as much as 50 percent compared with 2008 levels.

Nissan, owned 44 percent by France's Renault SA , said this week it would cut 20,000 jobs as it braces for its first annual loss in a decade. (Reporting by Denis Pinchuk, writing by Toni Vorobyova, editing by Will Waterman)

News source: reuters.com

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