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Fiat will build Jeeps in Russia

by Bill Cawthon on

Italian news paper Corriere della Sera reports that Fiat has signed a letter of intent with Russia’s Sberbank for a joint venture that will produce and sell Jeeps in the country.

Fiat and Chrysler Group want to expand their presence in growth markets like Russia to offset slow growth in Europe.

The deal has been working since last year when an alliance with OAO Sollers, Russia’s second-largest automaker, fell through in February. Sollers went with Ford, instead.

A Russian official said a deal was likely in which Fiat would work with a Russian partner to build a major new car plant in St. Petersburg during the first quarter of 2012. Various sources identified the partner as Sberbank.

Corriere said the letter signed last night proposes a joint venture with Fiat taking an 80 percent share. Sberbank would finance the project by offering a credit line to the new company.

Corriere said the joint-venture would invest 850 million euros ($1.14 billion) in the St. Petersburg plant which would produce 120,000 cars a year. It said a second plant would be opened in Moscow (most likely the ZiL factory as reported here on Allpar.com).

Fiat had no comment.

Thanks to RVC and Tryphoon for the tips!

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for just-auto.com, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.

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