Turkey’s Ford Otosan signs production deal in Russia

Turkey’s Ford Otosan signs production deal in Russia

Emre Özpeynirci ISTANBUL
Turkey’s Ford Otosan signs production deal in Russia

AFP Photo

Turkish automaker Ford Otosan, owned by Koç Holding and the Ford Group, signed a deal on Dec. 9 with Kaliningrad-based Avtotor Holding for the production of trucks and tow trucks in Russia.

The vehicles produced in Kaliningrad would be sold in the Russian market, with first production set to start at the end of December.

Ford Otosan aims to sell its products to Russian state-run companies, such as Gazprom, which prefer Russian-made trucks, and to overcome the 10 percent import tax, which is demanded by Russian authorities for vehicles produced abroad.

“The Ford Trucks brand will move one step further with this deal. We have invested in Russia, the largest truck market in Europe, to increase our competitiveness and to manufacture trucks in Kaliningrad,” said Ford Otosan CEO Haydar Yenigün.

In the initial stage, the company will assemble the trucks and tow trucks in Russia and then start production in the following period after the supplier industry grows, he said.

Kaliningrad is the free trade area of Russia, so Ford Otosan will be able to enter two new markets, Kazakhstan and Belarus, Yenigün said.

“The biggest advantage for us to have production in Russia will be to avoid the 10 percent import tax, which Russia charges for its heavy commercial vehicle imports. Moreover, we will be able to sell heavy vehicles to huge state-run companies in Russia, including Gazprom, which only buy vehicles made in Russia,” he said.

Ford Otosan aims to sell over 7,000 units in Russia annually by 2020.

Avtotor Holding has been in production in Kaliningrad for the last 20 years as the first private automotive company of Russia, said Avtotor CEO Valeriy Gorbunov just after the signature ceremony with Ford Otosan.

It is a big step for Avtotor and Russia to add Ford Trucks into its production line by 2015, he noted, adding that Avtotor has an annual production capacity of 15,000 heavy trucks.

Ford Motor originally withdrew from the global truck market when it sold its truck unit to Iveco in 1986, but returned to cargo truck production in 2012 with Ford Otosan’s Cargo truck.

The patent rights of the vehicle are owned by Ford Otosan, as the model was developed and first manufactured in the Eskişehir plant in Turkey in 2012. The new model is exported to 65 countries.