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. Last Updated: 07/27/2016

Toyota Breaks Ground at St. Pete Site

APThe Japanese automotive giant plans to invest $140.5 million in its first Russian assembly plant in St. Petersburg.
The Japanese auto giant Toyota on Tuesday laid the foundation stone of its new assembly plant just outside of St. Petersburg, vowing to reach an annual capacity of 200,000 vehicles "soon" after production starts in 2007.

Toyota plans to invest 4 billion rubles ($140.5 million) in the facility, becoming the first Japanese car manufacturer to build a Russian assembly plant.

President Vladimir Putin, who attended the ceremony along with St. Petersburg Governor Valentina Matviyenko and other Russian and Japanese officials, said that he was sure that "the production of St. Petersburg's Toyota will find a wide audience."

"I see it as a sign of trust from businessmen in the opportunities and the potential in the Russian economy," he said.

Former Japanese Prime Minister Yoshiro Mori, who also attended the high-profile event, called Toyota's arrival to the Russian market "a symbol of expansion of Russian-Japanese economic relations." "If this project is successful, other Japanese businesses will keep coming to Russia," he said.

The plant, partly financed by the European Bank for Reconstruction and Development, will have the initial capacity to produce annually 50,000 cars, the company's popular Camry model among them, but production numbers are expected to grow. Construction is set to begin next year, after reinforcement of the soil is completed.

"Soon we plan to expand the production to 200,000 units a year. The personnel would increase then by a total of 3,000 people," said Hiroshi Okuda, chairman of Toyota's board. However, Okuda did not specify how soon the production would reach that level.

Economic Development and Trade Minister German Gref said that Toyota could invest $250 million into the plant over two years and a total of $1 billion in the long term, The Associated Press reported.

Toyota also plans to open another production enterprise in the country, Okuda said. But he added that it was too early to speak about a possible new Russian facility in detail.

Last year, the sales of new foreign cars grew by more than 80 percent to 350,000 cars, and that number is expected to rise another 40 percent in 2005.

Major Foreign Automotive Projects
MakerInvestmentStart of productionAnnual outputLocation
Toyota$140.5 million200750,000 cars, including 20,000 Camrys Shushary, near St. Petersburg
Renault$250 millionApril 200560,000 Logan modelsMoscow
Ford$150 million200225,000 Ford Focus modelsVsevolozhsk, near St. Petersburg
GM-AvtoVAZ joint venture$241 million200275,000 Nivas and Chevrolet Vivas TolyattiChevrolet
Source: MT