Japan-based Isuzu's local joint venture on Friday began producing medium-duty trucks at a new assembly line in a sign that the automobile industry is not giving up in the face of a declining market.
Prime Minister Dmitry Medvedev attended the ceremony to kick off production in the Volga River city of Ulyanovsk. Isuzu's partner Sollers owns a plant there, called UAZ, which makes Russian sports utility vehicles and has provided premises for the Japanese assembly line.
The joint venture has been making Isuzu trucks since 2008, but last year decided to expand the local content of the work and the model range by investing in a new production facilities.
"This step will allow us to develop and produce new varieties of the trucks meant specifically for the Russian market," Sollers chief Vadim Shvetsov was quoted as saying in a company statement.
Sales of light commercial vehicles, like the ones that Isuzu will be making, declined 3.4 percent last year to 180,000 units, according to market research agency Avtostat. It was the first drop since 2009.
The local Isuzu plant has the capacity of 5,000 trucks per year. It started out making 1.5-6.5-ton ELF trucks and plans to add the 8-12.5-ton Forward models later this year, a statement from the joint venture said.
Isuzu will supply components for the trucks, and fairly much of the assembly of the final product will take place locally, including welding and painting work.
Controlled by Shvetsov, Sollers also makes South Korean sport utility vehicles Ssang Yong, Japanese sport utility vehicles Toyota Land Cruiser and two Mazda models, in partnership with Mitsui and Mazda, respectively.
GAZ Group traditionally led the market for light commercial vehicles last year, accounting for almost half of the sales, or 82,000 units. UAZ came in second with 22,000 sold trucks. Volkswagen and Ford trailed the Russian rivals.
In other Ulyanovsk events on Friday, Medvedev attended the signing of a deal whereby Swiss construction company Dega Group agreed to build an industrial park in the city. The company's chief inked the agreement with Ulyanovsk Governor Sergei Morozov.