Ford Sollers Breaks Ground for Russian Engine Plant; to Build EcoSport CUV

VIENNA – Ford Sollers Holding, the 50-50 joint venture between Ford and Russian vehicle maker Sollers, launches construction of a $274 million engine plant in Elabuga in the Russian Republic of Tatarstan.

The partners also announce they plan to build the Ford EcoSport cross/utility vehicle for the Russian market.

Ford Chief Operating Officer Mark Fields and Ildar Khalikov, prime minister of Tatarstan, on hand for the groundbreaking ceremony, pressed the button to count down the days remaining until the engine factory’s opening.

“Russia is a very important part of Ford’s One plan for profitable growth,” Fields says in a prepared statement. “The establishment of an engine plant here in Elabuga is another sign of the commitment Ford Sollers and its parent companies – Ford and Sollers – are making to serve customers in Russia and contribute to the growth of the Russian auto industry.”

The 460,000-sq.-ft. (42,600-sq.-m) facility, located near Ford Sollers’s vehicle plant in Elabuga, will build three versions of the 1.6L normally aspirated Duratec gasoline engine with 85 hp, 105 hp and 125 hp.

The Elabuga Engine Plant will have an annual capacity of up to 105,000 units, with the possibility for expansion of up to 200,000 engines a year. Production of the Duratec engine will begin in December 2015.

The new engine plant initially will employ 500 workers, with the potential for more job growth should production increase.

Ford is the second foreign auto maker to erect an engine plant in Russia after Volkswagen. Both are fulfilling targets agreed to with the Russian government in 2011 as part of the New Decree 166. One of the terms of the agreement calls for at least 30% of vehicles built in Russia to be equipped with locally manufactured engines as of 2016.

Ford, General Motors, the Renault-Nissan Alliance and VW signed the New Decree 166. Ford and VW are constructing new engine plants, while Renault-Nissan will produce engines at their AvtoVAZ joint venture facility in Togliatti.

GM will fulfill its targets by sourcing locally built engines for the next-generation Chevrolet Niva small SUV, Jim Bovenzi, president and managing director-GM Russia and Commonwealth of Independent States, told the Russian business daily Vedomostiin 2011.

Ford Sollers says the EcoSport will go on sale in Russia next year. Assembly will begin at the partners’ Tatarstan plant in second-half 2014.

“We are proud of Ford’s deep and successful SUV heritage,” Fields says. “The new EcoSport...brings together all of our knowledge and experience in a truly global product-development process.

“We are confident the EcoSport will be a great success with Russian customers in the important and growing SUV market segment.”

Ford Sollers declines to say in which of its two Tatastan plants, located in Elabuga and Naberezhnye Chelny, the EcoSport will be made or whether the project will start with semi-knocked-down or completely knocked-down assembly.

The Tatarstan-built EcoSport will be the eighth vehicle to be manufactured or assembled in Russia by Ford Sollers once it goes into production next year. Others models inlude the Ford Explorer and Kuga.