Mazda Motor Corp. plans to build cars in Russia in a joint venture with Russian carmaker Sollers.
The Japanese automaker said on Monday that it has signed a memorandum of understanding with Sollers to open a new factory to build Mazda models for the Russian market in the eastern city of Vladivostok.
Sollers has entered similar ventures with other automakers this year, including Ford Motor Co. and Toyota Motor Corp., to take advantage of government incentives to boost local production.
Mazda sales in Russia rose 77 percent to 28,000 vehicles between January and September this year, making the country its second-biggest market in Europe after Germany.
The company builds most of its cars in Japan and is under pressure to reduce exports due to the yen's historic strength.
A Russian production base would follow plans announced by Mazda in June to build a factory in Mexico.
Reuters contributed to this report