The plant should start assembling cars, mostly Grand Vitara four-wheel drive vehicles, in 2009. The two investors will control the plant on a parity basis, Japan's Nikkei newspaper said earlier this week.
The companies also signed a memorandum of cooperation with the St. Petersburg government. Under the document, the city administration will assign an estimated 23 hectares of land in the Shushary industrial zone near St. Petersburg.
"St. Petersburg is gradually turning into a Russian Detroit in a good sense," German Gref, the minister of economic development and trade, said at the signing ceremony, stressing that Suzuki will become the second Japanese carmaker to start production in Russia, after Toyota.
The plant is to roll out 30,000 cars annually and provide some 500 jobs.
Suzuki currently imports cars assembled in Hungary to Russia. The company's plans for Russia are based on expectations of a further boom in the country's car market.
Suzuki sold 16,000 cars in Russia in 2006 and intends to increase its sales in the country.
"We are planning to sell 50,000 cars in Russia annually, including imported cars," company Chairman Osama Suzuki said. He pledged the price of cars produced in St. Petersburg would be lower than imported models and would depend on the range of car components to be manufactured in Russia.
Suzuki is the fourth large carmaker planning to start production in Russia. Toyota expects to start producing its Toyota Camry cars by the end of this year, while General Motors is building a $300 million plant with an estimated capacity of 70,000 cars a year.
Nissan also intends to begin the construction of its plant near St. Petersburg in early July and plans to invest some $200 million in the venture.
