Germany / Russia / USA - Ford of Europe AG (a subsidiary company of Dearborn, USA-based Ford Motor Company) with its headquarters in Cologne, Germany has signed a memorandum of understanding (MOU) on a significant restructuring of its Ford Sollers joint venture in Russia, focusing exclusively on expanding its commercial vehicle business there. The MOU follows a strategic review of Ford Sollers by Ford and its partner, Sollers PJSC, which has its headquarters in Moscow, to improve the joint venture’s near-term profitability and investment efficiency. The MOU is expected to be finalised in the following months.

The company said the Russian passenger car market has been under significant pressure in recent years, with recovery slower than expected and a shift to lower priced passenger vehicle segments. This has resulted in the under-utilisation of the Ford Sollers manufacturing plants and inadequate returns on invested capital. As part of the planned restructuring action, Ford Sollers passenger vehicle production is to cease by the end of June 2019, with the closure of vehicle assembly plants in Naberezhnye Chelny and St. Petersburg, and an engine plant in Elabuga. Significant employee separations are required and will be delivered through voluntary programmes, the joint statement said.