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. Last Updated: 07/27/2016

Sollers Car Plant to Open in December

Sollers will open a plant in Vladivostok at the end of the year to assemble Korean cars, with investment in the project reaching 5 billion rubles ($169 million), Vadim Shvetsov, the auto holding’s director and main shareholder, said Friday.

The project, which received state backing in the summer, will be completed about a year after the federal government hiked import duties on used cars, angering drivers in the Far East who relied almost exclusively on imported Asian cars.

Separately, Industry and Trade Minister Viktor Khristenko said Friday that the government would extend the duties, and Vedomosti reported that an order had been approved by the relevant ministries and was ready to be signed by Prime Minister Vladimir Putin.

Shvetsov said the assembly project’s first stage would relocate Naberezhniye Chelny production lines, making 25,000 SsangYong SUVs per year starting Dec. 29. By the middle of next year, the plant will start making Isuzu trucks and eventually switch production to complete knocked down mode, which includes welding and painting, in 2012.

Localization of assembly can lower prices on the models, which are now imported from Korea’s SsangYong and Japan’s Isuzu, by 5 percent, he said.

Sollers bought space for the project from Dalzavod, a huge shipyard that built military boats and submarines in the Soviet period and declared bankruptcy in March after several years of economic despair.

Primorye Governor Sergei Darkin applauded the possibility of assembling cars there after signing an agreement with Sollers in March to develop a plant. The facility could employ up to 2,200 people.

Vneshekonombank, the state development bank, provided Sollers with a six-year, 5 billion ruble loan in July. VEB head Vladimir Dmitriyev said at the time that 1.8 billion rubles of the sum would go toward the Primorye assembly project.

“We are planning to make only foreign brands in Vladivostok. There are no plans to launch production of UAZ cars in the Far East,” Shvetsov said, Interfax reported.

Sollers, which was rebranded from Severstal-Avto last year, owns a majority stake in the Ulyanovsk Auto Plant, which makes UAZ off-road vehicles and minibuses. The holding also controls production sites in the Nizhny Novgorod region, and Naberezhniye Chelny and Elabuga, both in Tatarstan.

Space at the Naberezhniye Chelny plant currently being used to make SsangYong SUVs will be retooled to expand production of Fiat vehicles, a Sollers spokeswoman said.

Fiat chief executive Sergio Marchionne told Putin on Thursday that “one of our wishes is to make it possible to develop SUVs here in Russia,” according to statements posted on the government web site.

Earlier this year, Fiat took a stake in Chrysler, which has a range of SUVs.