Fiat may delay $1 billion Russian factory, official says
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ST. PETERSBURG, Russia (Bloomberg) -- Fiat may delay building a factory in St. Petersburg, Russia's second-biggest city, because of overcapacity in Europe, an official said.
Fiat planned to open a 850 million-euro ($1 billion) facility with annual capacity of 120,000 units in 2013 but the carmaker has not contacted the regional administration for three months and has not presented an investment plan, Sergey Vyazalov, St. Petersburg's deputy governor, said.
"The company has enough capacity in Europe to deliver cars to the Russian market," he said. "So I expect it will delay the project for several years."
Fiat is working on its strategy to expand in Russia and is defining details with Russian banks, CEO Sergio Marchionne told reporters on Sept. 28 in Paris. "There is a boom in the market, we made the right choice to enter it with our Jeep brand," Marchionne said.
New-car sales in Russia grew 15 percent to 1.9 million in the first eight months from the same period a year earlier, according to the Moscow-based Association of European Business. Fiat brand sales dropped 74 percent to 5,054 as the Jeep brand sales tripled to 2,957 vehicles.
Fiat's Italian car plants are running at 50 percent capacity.
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