Suzuki, Itochu to invest $135 million in Russian plant
Automotive News
 

MOSCOW (Reuters) -- Japanese carmaker Suzuki Motor Corp. and trading house Itochu Corp. plan to sign a memorandum to build a car plant in St. Petersburg with the Economy Ministry on Friday, a source close to the talks said.

The source said Suzuki and Itochu plan to invest 100 million euros ($135 million) in the plant and start construction in 2008. He said it will take 18 months to build the plant, which will then produce 30,000 cars a year.

Demand for new cars in Russia has surged in the last few years and is expected to hit 2.7 million to 3.0 million units per year in the next three to four years.

Russia's second biggest city, St. Petersburg, has been fast emerging as an important car industry hub, with analysts and officials alike calling it "a Russian Detroit", referring to the heart of the U.S. industry.

The Japanese joint venture would follow a number of other car firms who have launched assembly plants in Russia, mostly around St. Petersburg.