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Business news, 04.10.2012 15:36

Russia Politician Says Fiat Car Plant "Distant" Project -Report

Fiat Car Plant

The deputy governor of St. Petersburg has said he didn't expect Fiat SpA (F.MI) to implement a project to build vehicles in Russia in the next two years, according to a local news report Monday.
"This is a project for the distant future," Sergei Vyazalov was quoted by the Interfax news agency as telling a news conference. An English version of the report was obtained by Dow Jones Newswires.
Vyazalov said the Italian auto maker had held talks with local authorities about three months ago, but those talks had yet to come to an official end.
In February, Fiat announced a joint venture with Russian state bank OAO Sberbank (SBER.RS) to build cars and vans under Jeep and other brands in a EUR850 million investment, marking its latest effort to establish a bigger presence in the country's expanding market.
Fiat and Sberbank are to build one plant--most likely in the St. Petersburg area--and contract out the use of a second one in Moscow. This second plant is run by ZIL, or Zavod Imeni Likhachova.
The joint venture is to have a production capacity of 120,000 vehicles per year.
The aim was to start production within two years.
Fiat controls Chrysler Group LLC, the U.S. auto maker with brands such as Jeep.
Fiat declined to comment on the Interfax report, but Fiat Chief Executive Sergio Marchionne told Dow Jones Newswires at the Paris motor show last week that the project was going as planned. He didn't elaborate.
At the Moscow motor show in August, the head of Chrysler in Russia, John Stech, said progress on the project had been slow.

News source: FOX News Networ

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