UPDATE: Ford says quits Russian car market, to cede JV control to Sollers

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MOSCOW, Mar 27 (PRIME) -- Car producer Ford will stop producing cars in Russia by July, shut down the plants in the cities of Naberezhnye Chelny, Vsevolozhsk and Yelabuga and cede control over joint venture Ford Sollers to Russian partner Sollers, Ford Sollers said in a statement on Wednesday.

“The restructuring of the business envisages stopping manufacturing of cars by the end of June of 2019, subsequent shutdown of two car plants of Ford Sollers in Naberezhnye Chelny and Vsevolozhsk, and of an engine plant in the Alabuga special economic zone (in Yelabuga),” Ford Sollers said, adding that the measures will lead to a large number of layoffs.

“This represents an important step towards Ford’s target to deliver improved profitability and a more competitive business for our stakeholders,” said Steven Armstrong, president of Ford of Europe. “The new Ford Sollers structure supports Ford’s global redesign strategy to expand our leadership in commercial vehicles and to grow the business in Europe in those market segments that offer better returns on invested capital.”

The company said that the Russian car market was under a significant pressure and is recovering slower than expected.

Ford Sollers continues negotiations with partners concerning the future actions.

The new business will continue to produce the Ford Transit model in Alabuga, and the joint venture’s activity will focus on the LCV market.

“The shareholders Ford Motor Company and Sollers will remain partners in the new structure of Ford Sollers but Sollers will own a 51% stake in the charter capital of the joint venture,” Ford Sollers said.

Ford said it will spend U.S. $200 million to make payments to suppliers and dismissed employees as part of restructuring of its business in Russia.

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