MOSCOW, March 27 (Xinhua) -- Ford's Russian joint venture Ford Sollers will close three factories in the country and concentrate on producing Transit light commercial vehicle, Ford and Sollers said Wednesday.
"The joint venture will discontinue its passenger vehicle portfolio in Russia to help deliver a more competitive and sustainably profitable business going forward and support the company's commitment to exit less profitable segments," Ford said in a statement.
The joint venture will close its two vehicle assembly plants in Naberezhnye Chelny producing EcoSport and Fiesta models, and in St. Petersburg producing Focus and Mondeo sedans, as well as an engine plant in Yelabuga, by the end of June.
Ford said it currently expects the move will result in pre-tax charges of about 450 million to 500 million U.S. dollars.
The Russian passenger vehicle market has been under significant pressure in recent years, with recovery slower than expected and a shift to lower-priced passenger vehicle segments, resulting in the underutilization of the Ford Sollers manufacturing plants and inadequate returns on invested capital, Ford said.
By contrast, sales of the Ford Transit 2.0 ton commercial vehicle in Russia continue to grow, with the Ford Transit acclaimed as Russia's top-selling, non-domestic commercial vehicle nameplate with a segment market share of 15 percent, it said.
The updated Ford Sollers joint venture will be created on the basis of the existing plant in Yelabuga, located in the Alabuga Special Economic Zone, currently producing Kuga, Explorer and Transit models, Sollers said.
The joint venture will start operational activities on July 1, 2019, including the production and distribution of Ford Transit commercial vehicles, it said.
Sollers will take a 51 percent controlling stake in the restructured joint venture and Ford will own the remaining 49 percent, the companies said.
