Ford Sollers was a joint venture between Ford Motor Company and Sollers, a Russian automaker, that aimed to tap into the growing Russian market.
In 2012, Ford Sollers was established with the goal of producing and selling Ford vehicles in Russia and the surrounding regions.
The joint venture was a significant step for Ford to expand its presence in the Eurasian market, which was considered a key growth area at the time.
Ford Sollers started with a production capacity of 100,000 vehicles per year, which was later increased to 200,000 units in 2016.
The company's growth strategy focused on expanding its dealership network and increasing production capacity to meet growing demand.
Ford Sollers' market exit was announced in 2019, citing a decline in sales and a shift in focus towards electric vehicles.
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Business Strategy
Ford-Sollers is focusing on becoming more financially stable, with CEO Adil Shirinov aiming to break even for the first time since Russia's economic crisis began in 2014.
The company is close to achieving this goal, but additional measures are needed to get there. Ford-Sollers has the capacity to produce up to 350,000 cars per year, and its recent sales upturn should mean increased capacity utilization.
Shirinov believes the JV will continue to focus primarily on the CUV and SUV segments of the market.
Putting Growth Strategy in Gear
Ford's joint venture with Sollers in Russia is putting its growth strategy in gear. The company's share of the Russian market is just 3%, but it's making a comeback, with light-vehicle sales increasing 24.7% year-over-year in March.
Ford-Sollers' main goal is to become financially stable, which it's close to achieving for the first time since Russia's economic crisis began in 2014. The company's recent sales upturn should also mean increased capacity utilization.
The joint venture has the capacity to produce up to 350,000 cars per year, and it's focusing primarily on the CUV and SUV segments of the market. Industry analyst Ivan Beregin believes this is a smart move, given Russians' attraction to large utility vehicles.
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Ford-Sollers has launched sales of a new-generation Explorer priced at 3 million rubles ($52,000), which is a relatively big price tag in Russia. However, the company hopes to achieve big sales of the SUV, taking into account Russians' willingness to take out long-term car loans.
To expand within the market's C-segment, Ford-Sollers plans to strengthen its sales network and produce more local content. The company has already started manufacturing transmissions in Russia and plans to significantly expand its current network of 112 dealerships in the country.
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Exiting Russian Market 2019
In 2019, Ford Motor Company made the decision to leave the Russian market. This move was announced in April 2019.
The company's joint venture, Ford Sollers, stopped production in Russia and importation of passenger cars. Two car factories were closed as a result.
A new joint venture was created, with control from a Russian partner, but it only produces light commercial vehicles, specifically the Ford Transit, in Tatarstan.
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Ford's decision to leave Russia was not unique, as General Motors had also exited the market in 2015 due to declining sales and a weakening ruble.
GM stopped importing Opel and mass Chevrolet models, but maintained joint production with AvtoVAZ for the Chevrolet Niva. The company compensated Russian dealers for part of their investment in salons, allocating around $600 million for business restructuring in Russia.
Ownership
Ford Sollers is a Russian company that produces Ford cars and special vehicles. It owns 4 factories and a full-scale R&D center.
The company is dedicated to adapting and localizing Ford cars for the Russian market. This involves producing cars that meet local needs and preferences.
Ford Sollers produces 7 localized models of Ford cars. These models include the Ford Focus, Ford Mondeo, Ford Explorer, Ford Kuga, Ford Transit, Ford Fiesta, and Ford EcoSport.
Each of these models is produced at a different factory in Russia. The company has a factory in Vsevolozhsk near St. Petersburg, a factory in Yelabuga, and a factory in Naberezhnye Chelny.
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The Vsevolozhsk plant is the first full-cycle foreign brand in Russia. It started producing the Ford Focus in 2002 and now produces three body types of the car, including a sedan, hatchback, and station wagon.
The Ford Sollers plant in Vsevolozhsk also produces the Ford Mondeo business sedan. The company has a strict quality control system in place to ensure that all cars meet Ford global standards.
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