MOSCOW, May 23 (RIA Novosti) - Russia's largest carmaker AvtoVAZ [RTS: AVAZ] and Canadian-based manufacturer Magna will sign an agreement in Vienna Wednesday to form a joint venture to design, develop and produce C-class cars, Russia's first deputy prime minister said.
Sergei Ivanov said the agreement on the formation of the joint venture in Russia, which was earlier planned to be signed in the fall of 2007, will be signed on the sidelines of Russian President Vladimir Putin's official visit to Austria Wednesday.
"One of the agreements to be signed in Vienna today is an agreement on a joint venture between AvtoVAZ and Magna" to build a production facility, Sergei Ivanov said.
The Russian automaker and the Canadian car parts manufacturer plan to build a plant in the Volga city of Togliatti, where AvtoVAZ is based, which will put out 450,000-480,000 cars annually, with investment totaling $1.6-1.7 billion.
Ivanov, a former defense minister, said that Russia does all it can to provide a conducive investment environment for foreign manufacturers, who have flocked to Russia in recent years as the Russian market for automobiles has skyrocketed.
Last Friday, AvtoVAZ and Magna signed a protocol of intent on the formation of the JV in the presence of Russian leader Vladimir Putin, who pledged support for the project.
"We know your company," Putin said last week referring to Magna. "It operates in many countries, and now also in Russia. This project has good prospects. I hope it will be carried out. The Russian government will, without question, support these projects."
Magna, founded by Austrian immigrant to Canada Frank Stronach in the 1950s, designs and manufactures auto parts, and engineers and assembles complete vehicles, primarily for sale to major U.S. and European car manufacturers. As of March 2007, the company reported that it owned 235 production and 62 engineering and research and development centers in 23 countries on five continents.
