Concern Ford will stop production of passenger vehicles in Russia.
The American company Ford, the third largest car manufacturer in the US and the second largest in Europe, announced its intention to completely stop the production of passenger cars in Russia and focus on the production of light commercial vehicles.
Following the new strategy, Ford and its partner Sollers confirm the restructuring of the joint venture in Russia. The new business will build on the strength of the Ford Transit, one of Russia's best-selling commercial vehicle brands, to support the brand's continued presence in the country.
"Concern Ford will cease production of passenger vehicles in Russia in favor of developing a more competitive and consistently profitable business in the future, supporting the company's desire to invest in more profitable segments,” Ford said in a statement.
The production of passenger cars will be stopped until June 30, 2019. As a result of the restructuring in Russia, two car assembly plants in Naberezhnye Chelny and St. Petersburg will be closed, and the engine plant in Yelabuga will also stop working.
According to the company, in the new structure of Ford Sollers, the shareholders of Ford Motor Company and Sollers PJSC remain partners, while Sollers' share in the authorized capital will be 51%. The joint venture was established in 2011 by Ford Motor Company and Sollers in equal shares.
Earlier it was reported that if Ford leaves the Russian market, the vast majority of car dealers will refuse further car sales. Today, Ford Sollers has three production plants in Russia, the total capacity of which is about 350,000 vehicles per year. The plant in Vsevolozhsk produces Ford Focus and Mondeo, in Naberezhnye Chelny - Ford Fiesta and EcoSport. Since the beginning of 2019, the company's sales in Russia have already fallen by 45%, to 4.17 thousand units. After the factories close, Ford plans to pay $200 million to employees and suppliers.