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. Last Updated: 07/27/2016

UAZ Will Roll Out SUVs in Italy

APVladimir Putin showing Silvio Berlusconi a book titled "Berlusconi's Effect," which was published in Russia, in Sochi on Tuesday.
Russia's No. 3 carmaker UAZ will announce a deal during Italian Prime Minister Silvio Berlusconi's visit Wednesday to start assembling its Simbir sports utility vehicles in Italy later this year, company officials said.

UAZ will export car kits from its facilities in Ulyanovsk for assembly at a plant owned by elite Italian automaker De Tomaso Modena S.p.a., UAZ said. Production of the vehicle, which will be all-Russian except for an Iveco engine, is expected to reach 20,000 to 30,000 units per year.

"We have been working with De Tomaso since 1999, getting our products certified to European standards," said Stanislav Pavlov, spokesman for UAZ's owner, Severstal. "Now we are working on an industrial project together."

The Italian and Russian governments are to sign a formal agreement on the venture during high-level meetings with Berlusconi and his Italian delegation, Pavlov said.

Berlusconi arrived for the start of his two-day visit Tuesday afternoon. President Vladimir Putin greeted him in the Black Sea resort of Sochi, where the two leaders met for informal talks.

"Trade, space, technology, military-technical cooperation, security in Europe and the world, relations with Europe and NATO -- these are the issues I'd like to discuss with you," Putin said in televised remarks.

"Among the European leaders, I am one of the most convinced that Europe should open its doors to Russia," Berlusconi replied.

Tuesday's meeting, which was attended by the presidents' closest aides, will be followed up with broader talks in the Kremlin in Moscow on Wednesday.

A handful of announcements are expected to be made during those talks, including the UAZ partnership.

Italian Economics Minister Giulio Tremonti and Economic Development and Trade Minister German Gref are to sign an intergovernmental protocol on the project in Gref's offices, Pavlov said.

After that, Santiago De Tomaso, the son of company founder Alejandro De Tomaso, is to hold a news conference with UAZ president Eduard Shpakovsky and board chairman Vadim Shvetsov to announce the venture.

The value of the deal was not immediately clear.

De Tomaso said in a statement that it expects turnover of about $315 million over five years.

De Tomaso plans to build a plant to assemble the cars, but the first 200 models are to be assembled by the end of the year at its existing facilities.

Pavlov said the vehicle would retail for 16,000 euros ($14,000) and be sold in Italy, Spain, Portugal and France.

In Russia, the Simbir sells for $7,000 to $10,000.

De Tomaso said the Simbir will differ from competing models on the market because of its off-road credentials. Historically, UAZ automobiles have been considered the workhorse of the Russian military and Interior Ministry forces.

The project is a major change in the marketing strategy of both companies. Until now, De Tomaso has exclusively sold luxury sports cars aimed at individual high-profile clients, while UAZ has done the exact opposite, selling cheap, mass-produced vehicles to the government for use at hospitals and in the army.