Ford Sollers Opens $275 Million Engine Plant

Ford Motor Co.'s 50:50 venture with Moscow-based assembler OSJC Sollers has begun building engines at a new factory in Tatarstan. Ford previously imported all engines used in the vehicles it assembled in Russia.

The €247 million facility has initial capacity to make 105,000 engines per year. Ford Sollers says annual output could be expanded to 200,000 units if demand warrants.

Local engine production will help Ford increase domestic content to about 60% by 2020, thus enabling the company to qualify for lower tariffs on imported parts. Ford emphasizes the new plant reflects the carmaker's long-term commitment to the Russian market in spite of its current slump.

Passenger car and light commercial vehicle sales in Russia, which shrank 10% in 2014, plunged 35% in the first seven months of 2015, according to the Assn. of European Businesses in Moscow. Ford's sales this year are down 52%, totaling only 17,200 units in January-July.