Italian automaker Fiat SpA and Russia's Sollers OJSC, backed out of a potential partnership today following the signing of a Memorandum of Understanding (MoU) in February 2010 for the launch of a Russian joint-venture to produce passenger cars and SUVs.
Fiat, which controls US automaker Chrysler, and Sollers did not give any explanation for the breakup of negotiations, with both companies simply stating that they intend to continue expanding their existing operations and activities in the region. The 2.4 billion-euro deal signed last year was aimed at producing as many as 500,000 cars annually by 2016 and would have been supported by a 1.2 billion- euro loan backed by the Russian government.
Literally only minutes after the joint statement by Fiat and Sollers, Ford Motor Company came out with a press release announcing that is has signed a Memorandum of Understanding with Sollers, under which the two parties intend to launch a new 50:50-owned joint venture called Ford Sollers for the production and distribution of Ford vehicles in Russia.
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