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post #1 of 2 (permalink) Old 07-09-02, 06:28 AM Thread Starter
Mr. Embargo
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Ford May Quadruple Production at New Russia Car Plant

By Guy Faulconbridge

Vsevolozhsk, Russia, July 9 (Bloomberg) -- Ford Motor Co., the world's No. 2 automaker, may quadruple production at a new factory in Russia to take advantage of the country's fourth straight year of growth and cut car prices inflated by import duties.

The company may increase the number of vehicles produced annually at the $150 million factory in Vsevolozhsk, near St. Petersburg, to 100,000 in coming years from its present capacity of 25,000, said John Fleming, vice president of manufacturing for Ford Europe.

``We will continue to grow the plant as we see opportunities open,'' he said, in an interview with Bloomberg News at the opening of the factory today.

Ford, General Motors Corp. and Germany's Bayerische Motoren Werke AG have been reviving plans to expand in Russia that they shelved when the economy collapsed in 1998, drawn back by rising demand in Europe's most populous nation. Auto sales are expected to jump 27 percent in the next five years to 1.19 million vehicles, according to Standard & Poor's.

Ford also is starting production in Russia to avoid import duties that make cars more expensive to local consumers. The company will produce 8,000 Ford Focus models at the plant this year, selling them for about $10,900. The same car sells elsewhere in Europe for about $13,900.

``We know that it's a closed market in Russia, so if we wanted to participate in the growth we believe is here, we needed to be inside with manufacturing,'' Fleming said.


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post #2 of 2 (permalink) Old 07-09-02, 06:32 AM Thread Starter
Mr. Embargo
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ST PETERSBURG, 9 July 2002 –Ford has established a 25 strong team of purchasing specialists in 4 regional centers in Russia to find suitable suppliers to provide parts and material for the new St Petersburg plant.

Ford is committed to achieving 50 per cent local content within 5 years, but is also looking for suppliers who have the potential to supply Ford plants in Western Europe and elsewhere in the world. The ability to achieve high quality and reliable delivery are the main criteria on which potential suppliers are judged. A list of 250 possible suppliers has been identified and most of those have now been evaluated.

The first local suppliers to be awarded contracts for the St Petersburg plant are Bor Glass, which is producing glass for the side windows on the Focus and Elast-Technology, which will supply floor mats and mud flaps. Other locally sourced components incorporated in the first Focuses produced at St Petersburg include; door trims, seat foam and covers, battery covers and brackets and the jack. This amounts to around 12 per cent local content at launch.

"Russia has very talented people, low energy costs and a wealth of raw materials, so the potential is there to develop a strong automotive supply base, capable of competing in global markets. It will take time, but we are confident it will happen", said Bill Marshall Ford Russia Purchasing Manager.

"Our main criteria for choosing a local supplier is product quality, a willingness to meet the international ISO 9000 quality standard and, not least, a desire to work with Ford and realize the potential that the Russian market offers", he said. "We are very willing to share our expertise, because there is so much for everyone to gain from a successful automotive sector."

As other global manufacturers begin to produce in Russia, the demand for good suppliers will grow significantly, offering considerable opportunities to the best companies. Ford has already expressed a willingness to work with other global manufacturers to help develop the Russian supply base.

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