MOSCOW (Kyodo) Suzuki Motor Corp. announced Friday a plan to build a car assembly plant near St. Petersburg, Russia's second-largest city, jointly with Japanese trading house Itochu Corp.
Osamu Suzuki, president of the Japanese carmaker, signed a memorandum of understanding on the deal with Russian Minister of Economic Development and Trade German Gref and other Russian officials the same day, a Suzuki representative said.
Suzuki is the third Japanese automaker to set up a plant in Russia, after Toyota Motor Corp., which will begin production in December, and Nissan Motor Co., whose factory is set to be completed in 2009. Mitsubishi Motors Corp. is also considering building a plant in the country.
According to Russia's Interfax news agency, Suzuki and Itochu intend to invest more than $100 million in the facility, which is slated for completion in two to three years and will have an annual output capacity of tens of thousands of cars.
The economy of Russia, a major oil producer, has been booming in recent years, riding on the crest of high crude prices. The good times have fueled new car demand there.
Sales of Japanese vehicles soared 64 percent year on year in 2006, Interfax said.