GENEVA (AP) -- Fiat is considering going it alone in Russia, one of the world's fastest-growing auto markets, despite seeing a key partnership fall through, CEO Sergio Marchionne said Tuesday.
Ten days ago Fiat announced the unraveling of a planned joint venture with Russian automaker Sollers to build up to 500,000 cars, followed swiftly by the news that Ford was instead teaming up with the company. The timing raised questions about the behind-the-scene dynamics.
Asked if it was a kick in the face, Marchionne told reporters at the Geneva Auto Show: "I guess you could view it that way. I was ready for the kick."
He said Fiat has gone ahead and sought authorization to set up manufacturing capacity for up to 300,000 vehicles a year in Russia and that the company is in talks with other potential partners.
"The option is also do it on our own," he said.
Stephen Odell, Ford's chief of European operations, told reporters that talks with Sollers had begun before he returned to the company last August.
"We accelerated the discussions ... We were two very good partners, obviously looking for the right business opportunity, and the timing was excellent," Odell said. He said Sollers was open with Ford about the memorandum of understanding it had with Fiat.
Odell said he expected to sign the joint venture by the third quarter of the year, and be operational as early as the fourth.
"An MOU is what it is, and I'm pretty confident we'll move ahead to a signed contract and a JV. We've had excellent discussion with Sollers. I'm convinced Sollers is committed to the JV, as are we. We are committed to a long-term relationship" Odell said.
Ford, which was the first foreign carmaker to set up manufacturing in Russia in 2002, currently has the capacity to make 120,000 vehicles a year there. The plant produced just 82,000 last year, due to slackened Russian demand.
Ford is aiming for a capacity within the JV of 350,000 units within four years, which would qualify it for lower duties on imports of components and vehicles, he said.
"We believe we will meet the decree," Odell said.
Odell said Russia could grow to be a 4 million to 5 million a year market in the next five to 10 years, which would put it second behind Germany in Europe.