MILAN, Italy (AP) _ Fiat Group Automobiles SpA announced Tuesday
that it has signed a letter of intent to create a joint venture with
Russia's Severstal Auto to build and sell Fiat brand cars and
commercial vehicles in Russia.
Production of Fiat vehicles under the 50-50 joint venture is to
begin in the first quarter of 2008, Fiat said in a statement.
``All of the vehicles produced in Russia will meet the quality
standards of the Fiat Group,'' Fiat said, adding that it will decide
the product range.
While details of the Severstal deal were still being worked out,
it is part of Fiat Group CEO Sergio Marchionne's strategy seeking
industrial alliances and joint ventures to share costs and enter key
``Severstal Auto's knowledge of the Russian market will reinforce
Fiat's investment and efforts in the region,'' Marchionne said in
Severstal Auto's CEO Vadim Shvestov called the deal ``an
important step on the road to a strategic collaboration between Fiat
and Severstal Auto.''
Severstal Auto, the carmaking division of Russian steel group OAO
Severstal, recently announced a joint venture with Japan's Isuzu
Motors to build trucks in Russia. It already has licensing
agreements with Fiat SpA and South Korea's Ssangyong Motor Co.
The deal was announced on the sidelines of the Frankfurt Auto
Show, where Fiat Auto's chief executive said he was optimistic about
increasing the company's market share through 2007, but warned it
may taper off in 2008.
Luca De Meo said a new model lineup, ongoing cost cuts and plans
for international alliances should help it expand its share of the
competitive automotive market this year.
``I believe we'll gain market share this year,'' he told
reporters, but said that ``2008 will be a year of consolidation.''
He said that the sales of the Grande Punto had helped drive
sales, while the Bravo family sedan, launched in February, was
performing ``in line with expectations.''