Ford Motor has agreed to acquire a controlling interest in its joint venture (JV) with Russian car company Sollers as well as provide additional funding to the Ford Sollers JV.
The Ford Sollers JV produces and imports Ford products, including vehicles, parts and accessories in Russia.
Headquartered in Khimki, Moscow, the company operates production facilities in Vsevolozhsk, St. Petersburg; Naberezhnye Chelny and Elabuga in Tatarstan.
The agreement comes after Ford-Sollers JV recorded a loss of RUB5.5bn ($107m) last year due to a drop in sales following the downturn in the economy and rouble value.
Under the new agreement, Ford will buy preferred shares while retaining the 50 / 50 split of the ordinary shareholder structure.
Sollers first deputy CEO and CFO Nikolay Sobolev said: "We embrace the intentions of Ford to deliver financial support, essential to provide a platform for future growth of the joint venture.
"Ford and Sollers are working jointly as partners, to improve the business outlook for the Ford Sollers joint venture on the Russian market, which is believed to be amongst the largest in Europe."
The funds will be used to support new product launches and further investments in domestic component manufacturing.
Ford and Sollers will be able to buy back Sollers 50% interest in the JV at a minimum predetermined value payable at a later date.
Reuters quoted Ford as saying: "Both partners will continue to work jointly to improve the business outlook for the Ford-Sollers joint venture by expanding its vehicle line-up to better meet the needs of Russian customers."
Image: The Ford Sollers JV produces and imports Ford products, including vehicles, parts and accessories. Photo: courtesy of Ford Sollers.