Economy, Auto

Russia’s Sollers Profit Halved in 2016

Russia’s Sollers Profit Halved in 2016Russia’s Sollers Profit Halved in 2016

Russian carmaker Sollers said it had turned a profit of 1.6 billion roubles in 2016 ($28.02 million), versus 3.1 billion roubles in 2015 following a slowdown of the Russian automotive market due to sanctions on the country.

Sollers, the joint Russian-US automotive plant which produces Ford, Mazda, Ssangyong, Toyata and UAZ models was created in 2002 as OAO Severstal-Avto, the company has steadily grown is list of vehicles in the past decade, Reuters reported on April 14.

The sales in the past year show a slow recovery from the prior fiscal year which saw the firm along with several other Russian auto companies hemorrhage cash.

However, a subsidiary of the company AvtoVAZ, which produces the old Lada model, reported in February that Russians are opting out of buying a new Ford or Mazda but relying on the much cheaper Lada from the Soviet-era still being produced by the firm.

 Hurting in Recent Years

AvtoVAZ has been hurting in recent years and in February stated it would issue 95 billion roubles (€1.5 billion) in shares to help rid itself of some of the accrued debt.

Earlier this year during the Tehran Auto Show in February, UAZ said it had signed a deal with a local automotive firm Tavan Khodro Jey to produce three vehicles in the country.

The Patriot will be priced near 1.1 billion rials ($28,900), while the pickups are estimated to cost around 800-900 million each ($20,000 - $23,000).

UAZ export director Andrey Dorofeyev, confirmed at the time previous comments by the Iranian partner, that his firm is pushing ahead with plans to create the first joint Irano-Russo auto production line in the country.

“With respect to our future production in Iran; the UAZ Patriot and Cargo is due to be produced with our partner Tavan Khodro Group” Dorofeyev said.

The Tavan Khodro deal is unlikely to be a conflict of interest for Ford as they are only a shareholder in Sollers which produces the UAZ pickups.

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