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Italian Fiat is to invest $ 1.1 billion into Russia.

The Russian Ministry of Economic and Development reports that Italian concern Fiat SpA is to invest 1.1 billion of dollars into construction and automobile factory. It will allow to produce 120,000 cars per a year. These actions will also attract government benefits in order to restore the auto industry.

Dmitry Levchenko a director of Project Finance Economic Development and special economic zones has announced to reporters that the company has tried to consider an option to carry this project out on its own and should provide information to the end of a week. All this mess is connected with a moment when the company has lost a Russian partner.

"We have prepared an agreement to be signed this week. Fiat has signed an agreement under the old mode of manufacturing according to which the company is required to produce 25 000 cars a year but the Italian concern has taken additional responsibilities and increased production levels up to 120 thousand cars a year," - says Levchenko.

Levchenko's statements points out that Fiat concern has managed to provide more lenient conditions than its competitors who have a Russian partner.

According to preliminary agreements signed earlier this year, foreign carmakers are required to produce 350 000 cars in Russia per year, which is far more in comparison with announced target of 25 000 in exchange for concessions on import of components.

The new scheme has surprised representatives of the European Union and may slow down the process of Russia joining the World Trade Organization.

18 July 2011
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