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. Last Updated: 07/27/2016

Ford to Double Output by '06

FordBy January, Ford wants to boost capacity of its Russian plant to 60,000.
Ford will sink another $30 million into Russia to more than double its output by January next year, the company's top European executive said Thursday.

The U.S. automotive giant said it would boost the capacity at its Vsevolozhsk plant, near St. Petersburg, from 25,000 Focus models to 60,000, responding to the "great success" with Russia's increasingly choosy motorists.

"To meet the demand, we will have annual plant capacity increased to 60,000 per year by January 2006," John Fleming, president of Ford Europe, told a news conference Thursday.

Ford has so far invested $200 million in its Russian facility, which it opened in 2002. The company said that the St. Petersburg plant was Ford's only factory in the world producing the Focus model in all four body styles: three- and five-door hatchbacks, sedans and station wagons.

The company's next expansion step in Russia comes at a time when Ford is facing a sales decline and laying off thousands of employees in North America.

Last week, Vedomosti reported that Ford's Russian plant, the country's first automotive facility of a foreign automaker, was not turning a profit due to low output, among other things.

Ford declined to discuss its financial performance. "That's not something we would announce publicly," said Fleming.

Denis Nushtayev, an analyst with the Metropol investment bank, said that Ford might be increasing capacity with the hope of finally creating profit. "But until 50 percent to 60 percent of components are produced locally, things are unlikely to change," he said.

Ford set up shop in Russia under the condition that by 2007, 50 percent of its parts be domestically produced. Right now, up to 30 percent of components are locally produced by Russian and European suppliers, which followed Ford to St. Petersburg, Fleming said. Locally produced parts include glass, trim parts, carpets and seats, he said.

The Focus sells for between $11,720 and $16,000. With more than 28,000 Focus models sold last year in the country, Russia was ranked No. 5 in Europe by volume of Focus sales, said Henrik Nenzen, president of Russian and CIS operations at Ford. Ford's overall sales in Russia totaled 38,700 in 2004.