Sollers Ends Negotiations with Fiat Group for Joint Venture in Russia, Then Signs Deal with Ford

Italian automaker Fiat SpA and Russia's Sollers OJSC, backed out of a potential partnership today following the signing of a Memorandum of Understanding (MoU) in February 2010 for the launch of a Russian joint-venture to produce passenger cars and SUVs.

Fiat, which controls US automaker Chrysler, and Sollers did not give any explanation for the breakup of negotiations, with both companies simply stating that they intend to continue expanding their existing operations and activities in the region. The 2.4 billion-euro deal signed last year was aimed at producing as many as 500,000 cars annually by 2016 and would have been supported by a 1.2 billion- euro loan backed by the Russian government.

Literally only minutes after the joint statement by Fiat and Sollers, Ford Motor Company came out with a press release announcing that is has signed a Memorandum of Understanding with Sollers, under which the two parties intend to launch a new 50:50-owned joint venture called Ford Sollers for the production and distribution of Ford vehicles in Russia.

Under the new proposed joint venture with Ford, Sollers, which is the second largest producer of passenger and light commercial vehicles in Russia, local plants in Vsevolozhsk (St. Petersburg region) and in the Republic of Tatarstan, will manufacture a range of Ford passenger cars and light commercial vehicles at local production facilities.

“We are delighted to be taking this next step for Ford in Russia with our proposed partner, Sollers,” said Stephen Odell, chairman and CEO, Ford of Europe. “This is a great opportunity, and will provide Ford customers in Russia with more products and better service.

“We are inspired by the opportunity to work with Ford,” said Vadim Shvetsov, general director of Sollers. “We are confident that our mutual efforts on the development of manufacturing facilities, new product launches and localization of parts content will ensure success for our strategy, and a leading position for the future joint venture company on the Russian market.”

Ford, which has been producing cars in Russia since 2002, did not disclose the financial terms of the deal with Sollers.

2011 Fiat 500 Coupé Zagato Concept

This year's edition of the Geneva Motor Show is buzzing with concept models of all sorts of sizes and shapes. The one you see pictured above is based on the popular Fiat 500 mini and is the result of the collaboration between the Fiat Group Automobiles' Centro Stile and the Zagato design house.

Showcased at the Fiat stand, the "500 Coupé Zagato" is said to have been inspired by the namesake predecessor built in the 1950 by the famous Italian bodyworker on the chassis of the original 500.

From the window line and below, the 500 concept is identical to the standard three-door hatchback model. However, the concept gets a completely new top with a sloping coupe-like roof featuring Zagato's trademark double-bubble design.

Other features include the burnished chrome exterior elements, 17-inch chrome shadow alloy wheelss with a brand new double spoked shape and synthetic inserts wrapped in 205/40 R17 tires and 4 perforated brake discs.

The concept is 3,550 mm long, 1,630 mm wide and 1,490 mm high, with a 2,300 mm wheelbase. Inside, Fiat says the 500 Coupe gets a 2+2 seating layout and a bespoke interior with sporty "diamond" seats trimmed in black and yellow two-tone leathers and other unique features.

Power for the 500 Coupé Zagato is provided by Fiat's turbocharged two-cylinder gasoline unit with 105 HP at 5,500 rpm and 155 Nm (114 lb-ft) of peak torque at 2,500 rpm, which promises reduced fuel consumption and CO2 emissions of just 95 g/km.

Geneva Preshow: Fiat Publishes New Photos of Freemont Crossover

The star of Fiat's exhibition area at the Geneva Motor Show and the first Fiat-branded vehicle to come out of the partnership with the Chrysler Group is the new Freemont 7-seater crossover. It doesn't take a rocket scientist to see that the Freemont is a re-badged 2011 Dodge Journey, but if for whatever reason you weren't satisfied with the first batch of official photos, the Italians have just released a more comprehensive set that includes pictures of the interior as well.

We'll remind you that the Freemont is due to go on sale in Fiat dealerships across Europe from the second half of 2011. The Italian firm's newcomer will initially come with front-wheel drive and a Fiat-sourced 2.0-liter turbo with 140HP and 170HP, linked to a manual gearbox. By the end of the year, Fiat will also offer two four-wheel drive versions fitted with the 170HP 2.0 MultiJet diesel, and Chrysler's 276HP 3.6-liter V6 petrol unit. For more details on the Freemont, check out our previous story here.