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. Last Updated: 07/27/2016

Ford to Up Production by 20%

Ford Motor Co., the world's No. 2 automaker, said demand in Russia for foreign-brand cars is soaring by as much as 40 percent, prompting the carmaker to expand production at its Russian plant by one-fifth next year.

Ford's factory near St. Petersburg will build 21,000 vehicles in 2004 compared with 17,000 units planned for this year, said Henrik Nenzen, Ford president for Russia.

"Our main worry is to produce enough, a slightly unusual problem perhaps," Nenzen said. "We are very positive and we are very happy about Russia. The potential is enormous."

Russians are buying more foreign cars and luxury goods as the economy expands for a fifth straight year and the longest boom since the collapse of the Soviet Union boosts salaries. Buyers in the country are on a four-month waiting list for the Ford Focus, which costs about 65 times the average monthly wage.

Ford, based in Dearborn, Michigan, opened a $150 million factory in Vsevolozhsk, near St. Petersburg, last year in an effort to reduce prices inflated by import duties.

Russia has expanded to become Ford's 10th largest market in Europe compared with 24th in Europe when the plant opened.

Russians' purchases of foreign-brand cars will increase to 238,000 vehicles in 2004 from 170,000 units this year, according to Nenzen.

The Ford Focus costs 10,800 euros ($11,800) in Russia compared with the average monthly wage of 5,460 rubles ($180) that the Economic Development and Trade Ministry predicts for this year, based on today's euro exchange rate for the euro.

Russia increased import duties on cars older than three years on July 1. Nenzen said that may help boost sales of the locally built vehicles.

Ford added a second daily shift at Vsevolozhsk in April. Nenzen said a decision on a third shift has not yet been made.