Ford Sollers Russia Venture Cuts Carmaking as Sales Drop

Ford Motor Co. (F)’s Russian carmaking partnership with OAO Sollers (SVAV) is reducing production and cutting jobs in response to a decline in the vehicle market this year.

The Ford Sollers plant near St. Petersburg, the country’s second-largest city, is suspending manufacturing for a combined 20 days from August through September, and will drop one of its three daily shifts after that, the venture said today in an e-mail. Talks are under way with labor unions on the workforce reductions, it said. A spokeswoman in Moscow declined when contacted by phone to specify how many posts may be eliminated.

“Sales of C-segment cars, including the Ford Focus, dropped by 16 percent in the first half of 2013,” the company said. “A new working schedule will allow the company to maintain production efficiency.”

Russia’s automotive market has been shrinking as economic growth slows. Six-month industrywide sales of new cars and light commercial vehicles fell 6 percent from a year earlier to 1.33 million units, with demand for models from Dearborn, Michigan-based Ford plunging 19 percent, according to data compiled by the Association of European Businesses in Russia.

The seven-month automotive-market decline was also 6 percent, including an 18 percent drop at Ford, the trade group said yesterday in a statement. A Russian government incentive program to encourage car purchases may help accelerate a “gradual improvement to the point of stabilization in the coming months,” the association said.

General Motors Co.,the biggest U.S. carmaker, is closing its St. Petersburg plant for a four-week vacation through Aug. 24, longer than the normal two-week summer shutdown, to keep production in line with demand, the company said in mid-June.

To contact the reporter on this story: Anatoly Temkin in St. Petersburg at atemkin@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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