Ford to work with Sollers to manufacture cars in Russia

The world's most profitable car company, Ford Motor, announced this week that it will team with a carmaker in Russia to produce and distribute cars in the Eastern European nation.

The move comes as Italian car maker Fiat and Russian automaker Sollers announced that they were ending a partnership they agreed upon last year through which they would produce up to 500,000 vehicles each year in Russia; the companies said in a joint statement Friday they intended to "pursue independent strategies" instead.

Ford and Sollers have signed a memorandum of understanding, giving both companies equal stakes in their joint Russian venture, Ford Sollers. Per terms of the deal, local factories in the St. Petersburg region and Tatarstan will make Ford passenger cars, light commercial vehicles and engines; moreover, the venture will also run a stamping facility that will be tasked with providing local parts for Ford vehicles made in the country.

The joint venture is expected to begin operations by the end of 2011 and will give a boost to Russia's auto industry and its supply chain, the chief executive of Ford of Europe, Stephen Odell, said in a statement.