Monday, November 12, 2007

Magna could build Russian auto plant for Chrysler

November 12, 2007 - 1:00 pm ET
UPDATED: 11/12/07 1:30 p.m. EST

TORONTO (Reuters) - Canadian auto parts maker Magna International Inc. is planning to build a $500-million plant in Russia to assemble Chrysler vehicles, according to reports in the Russian media today.

Magna has filed an application with Russia's Ministry of Industry and Energy to build a plant with the capacity to manufacture 150,000 cars a year, possibly doubling that in the future, Russia's Kommersant newspaper said.

Magna spokeswoman Tracy Fuerst said the reports were speculative and therefore Magna would not comment on them.

Magna, founded by Canadian tycoon Frank Stronach, will be partnered in the venture with Russian billionaire Oleg Deripaska, the newspaper said.

Deripaska, who owns Russia's No. 2 automaker Gaz, bought a 20 percent stake in Magna in September for $1.5 billion.

It wasn't clear what Chrysler models would be produced at the Russian plant, Kommersant said.

Elena Matveeva, a spokeswoman for a unit of billionaire Oleg Deripaska's GAZ, Russian Machines, declined to confirm the report Monday evening. "It's too early to discuss this topic," she said, referring all calls to Magna.

Last month, Vedomosti, a Russian business daily, reported that St. Petersburg Gov. Valentina Matviyenko said Magna began preparatory work to build a plant in Shushary, just outside St. Petersburg. A Magna spokesman declined to comment on the report at that time. Several foreign carmakers -- Ford, Toyota, General Motors, Nissan and Suzuki -- have opened or are building assembly plants in St. Petersburg.

Monday's report in Kommersant follows an earlier announcement by Russia's top carmaker AvtoVAZ that it wouldn't build a joint plant with Magna in Tolaytti. The two companies have dropped plans to build the $2 billion plant because it would be "economically disadvantageous," AvtoVAZ said in a statement earlier this month.

Magna ranks No. 4 on the Automotive News list of the top 100 global suppliers with worldwide original-equipment automotive parts sales of $23.88 billion in 2006.

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