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Severstal-Avto Invites Fiat in Green Field
Severstal-Avto and Fiat are creating a venture that will focus on Fiat distribution in Russia and on manufacturing C-class model targeted at emerging markets. So, it looks like Fiat has staked on Severstal-Avto as the key partner here and its talks with AvtoVAZ will come to nothing.
Severstal-Avto and Fiat inked a memorandum during the World Car Show in Frankfurt yesterday, September 11, 2007. The document spells out creation of a pari passu venture to be incorporated before this year-end.
The venture will deal with Fiat distribution in Russia, which has been Severstal-Avto’s business since December 2005. Moreover, it will get facilities to assemble Lineas of Fiat presented at the Car Show in Istanbul in 2006 and viewed the key model for markets of Russia, China and Eastern Europe, where the sedans are most popular.
Although Severstal-Avto first wanted to assemble Lineas at its own facilities, today’s intention is to construct separate greenfield plant presumably in Tatarstan.
By creating a venture with Severstal-Avto, Fiat has gained access to control over a dealers’ net of 60 centers, which is expected to expand to 85 this year. According to European Business Association, Fiat sold 10,000 cars in Russia in January to July of this year (the 18th position). The analysts say the result is not bad for a brand emerged on the market just a year ago – Fiat launched its Russia’s sales in September of 2006.
www.kommersant.com
All the Article in Russian as of Sep. 12, 2007
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