Ford Sollers is considering gearbox production in Russia

Ford Sollers is considering gearbox production in Russia

TASS – Ford Sollers is exploring possibilities to launch gearbox production in Republic of Tatarstan in Russia. The relevant statement has been made by the chairman of the joint venture: Adil Shirinov to journalists.

“Gearbox production is one of the requirements of the special investment contract (SPIC), which is currently being formulated by the Russian Ministry of Industry and Commerce, in cooperation with the players of the market willing to develop their operations in the market.  Upon completion, the conditions will be regulated by the SPIC, to be followed by individual agreements with each of the companies. Where – the question is straightforward for me, here, in Tatarstan ” – Shirinov said. 

Shirinov has added that the amount of investment for gearbox production is being calculated at the moment. The figure will depend on the requirements, which will be finally determined on the investment contract. The depth of localisation will be an important factor in the process.

Ford Sollers joint venture was established by Ford Motor Company and Sollers in October 2011, on equal terms. The enterprise manufactures Ford Focus and Ford Mondeo in Vsevolozhsk, Ford Fiesta and EcoSport in Naberezhnye Chelny and Ford Kuga, Explorer and Transit in Elabuga. According to the AEB data, Ford Sollers sales have increased by 10% in Russia in 2016, with 42.528 vehicles and by 18% in 2017, with 50.360 units.

The special investment contract mechanism has been in force in Russia since 2015. Domestic or foreign companies, as well as individual entrepreneurs can sign SPICs with authorised executive bodies of the state (Ministry of Industry and Commerce, regional governments) under the terms of the mechanism. In return for compulsory investments in particular industrial projects, the companies will be eligible for tax preferences, in the form of full exemption from property taxes or reduction on corporate tax rates down to 0% (20% as standard), as well as getting a guarantee of tax freeze for the duration of the contract.

However, there’s a limit on corporate tax preferences: the privileges will only be available,  if the income generated from the sales of products, manufactured under the SPIC forms at least 90% of total sales.