Ford to invest $250 mln to double output at Russian plant
Automotive
Ford Motor Co., the world's third-largest automaker, will invest $250 million to more than double output and assemble additional models at its plant in Russia, where sales growth is outpacing other markets in Europe. The commitment is part of an agreement Ford signed with Russia's Economy Ministry yesterday that upgrades the Dearborn, Michigan-based company's legal status. 40% of the components it uses by value are now locally made, allowing it to avoid customs duties, the ministry said on its Web site. The investment more than doubles the $230 million Ford has spent on its plant near St. Petersburg since 2001 and will allow the company to boost output of its compact Focus sedan to 100,000 units a year from 60,000 this year. Ford will also begin assembling the midsize Mondeo sedan and Maverick sports-utility vehicle, with production targets of 30,000 and 20,000 a year, respectively. Ford Europe is increasingly important to Chief Executive Officer William Clay Ford Jr.'s efforts to turn around the carmaker, which posted a companywide loss of $123 million in the second quarter. The North American unit lost $797 million, excluding one-time costs. Ford Europe's profit spiked 59% in on „very strong demand” in Russia, Turkey and Italy, chief John Fleming said last month. „The Russian car market is growing ahead of its economy,” Stanley Root, a PricewaterhouseCoopers audit partner, said July 20 at the presentation of a survey of the market. „In the next five years it may grow at double the pace of the economy.” Russians bought 61% more new foreign cars in the first half than they did in the same period a year earlier, 318,000 versus 197,000, PWC said in the survey. Sales advanced 29% to $6.4 billion. Ford Russia will almost double its Russian workforce, from about 2,000 now to more than 3,500, to meet its targets, the Economy Ministry said in the statement. (Bloomberg)
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