Jeeps, or some parts, will soon be Russian bound.
Chrysler’s Jeep brand was one of the keys to the Fiat-Sollers joint venture that will build up to 500,000 vehicles annually in eastern Russia. The deal will benefit Chrysler, with both licensing income and cash for the Jeep vehicle kits exported to Russia, although local content requirements will diminish the economic impact somewhat. (see Fiat and Sollers Announce JV in Russia)
Fiat CEO Sergio Marchionne had been scheduled to address the prestigious Chicago Economic Club Thursday, but turned the duties over the Chrysler executive vice president Ralph Gilles instead after a hastily arranged trip to Russia.
Russian Prime Minister Vladimir Putin said he would not be able to sight the deal until next May, if Marchionne did not show to sign the documents today.
Russia, which is beginning to recover from a deep recession that cut auto sales there in half, is expected to be one of the fastest growing new vehicle markets in the world over the next decade, according to a new study by the Boston Consulting Group.
Gilles said he could not say what kind of resources Chrysler will be expected to devote to the project. “I just learned about this,” he said after his speech to the Economic Club of Detroit.
Nevertheless, other Chrysler executives said the deal has great potential for Chrysler.
Vadim Shvetsov, CEO of Sollers, and Sergio Marchionne, CEO of Fiat Group, signed the memorandum of understanding in the in the presence of Vladimir Putin, the Prime Minister of Russia, which has promised to support the $3.3 billion joint venture with low-interest loans.