Jul 01, 2005: Daimler-Chrysler Picks Cars for Russia

THE ST. PETERSBURG TIMES

Daimler-Chrysler has picked the range of car models it will assemble at the company‘s planned factory in St. Petersburg, a German business daily reported Thursday.

Handelsblatt, citing business circles, said that U.S.-German auto concern Daimler-Chrysler has all but finalized its plans for Russia, which state that the St. Petersburg factory will assemble C- and E-class Mercedes models.

In addition, the corporation has decided to produce several Chrysler models that will compete with lower priced foreign brands, in particular Ford, which already assembles locally, on the outskirts of St. Petersburg, the newspaper said, citing people close to the Daimler board of directors.

Daimler-Chrysler board chairman Juergen Schrempp met President Vladimir Putin in Moscow in May to discuss the project with him personally, where he expressed hope that "the first Mercedes will come off the conveyor belt in St. Petersburg this fall."

The company‘s investment has been estimated at about $100 million to $300 million. Industry analysts say the plant will need to assemble no less than 100,000 autos a year to be profitable, although the initial capacity is expected to wheel out annually about 25,000 vehicles.

The location near St. Petersburg is "all but under lock and key," Handelsblatt said. All that remains to be tidied up are specific questions regarding customs duties, sources told the newspaper.