Fiat says to produce 300,000 cars a year in Russia

MILAN: Italian auto giant Fiat outlined plans on Friday to produce 300,000 cars per year in Russia, just days after it was replaced by Ford in a partnership there with Russian automobile group Sollers.

Fiat said it had sent a memorandum of intent to the Russian government that "envisages the establishment of manufacturing capacity for up to 300,000 vehicles per year," including passenger cars and commercial vehicles.

"The Fiat and ( Chrysler) Jeep brands will be the mainstay of this project ... This plan will be accompanied by a commitment to further expand and strengthen Fiat's dealer network," the Italian company said in a statement.

Fiat is merging with US auto giant Chrysler and has outlined plans for expansion in emerging markets. Industry analysts said the fall-out with Sollers may have happened after Fiat tried to drive too hard a bargain.

Fiat announced last month that it had returned to profit in 2010, beating analyst forecasts. It enjoyed strong sales of lorries and tractors, with the Brazilian market performing particularly well.