Fiat signs deal to make cars, engines in Russia

0 Comments | AFP, June, 2008

SAINT PETERSBURG (AFP) — Italian automaker Fiat signed a deal worth 305 million dollars (194 million euros) with Russia's Severstal-Auto on Saturday to produce cars and engines in Russia, an official statement said.

A joint venture will initially produce 50,000 Fiat Linea cars per year, said a statement from local authorities in Tatarstan in the Volga region, where the factory will be based.

The deal -- signed on the sidelines of an economic forum in Saint Petersburg -- is the latest example of a rush of foreign automakers to Russia, which is set to become Europe's biggest car market in the coming months.

The first Fiat Lineas are to be produced by the end of this year using an existing plant. A new factory is to be built by 2009, and capacity could reach...