Ford signs heavy truck deal in Russia

[kscarbel2]

Daily News / December 11, 2014

Turkey-based heavy truckmaker Ford Otosan signed a deal on December 9 with Kaliningrad-based Avtotor Holding for the production of heavy commercial trucks in Russia. Production is set to begin at the end of December.

Ford Otosan is a joint venture between the Ford Motor Company and Koc Holding.

Ford Otosan is targeting Russian state-run companies, such as Gazprom, which currently operate Russian trucks.

By producing Ford Cargo heavy trucks in Russia, Ford Otosan can avoid the 10 percent tariff placed on imported trucks by Russian authorities.

“The Ford Trucks brand will move one step further with this deal. We have invested in Russia, the largest truck market in Europe, to increase our competitiveness and to manufacture trucks in Kaliningrad,” said Ford Otosan CEO Haydar Yenigün.

Initially, Ford-Otosan will assembly heavy trucks from SKD (semi-knocked down) kits, and then transition to CKD (completely knocked down) production using a growing amount of locally-sourced parts as soon suitable suppliers can be identified.

With Kaliningrad designated as a free trade zone, Ford Otosan will also be able to enter two new country markets, Kazakhstan and Belarus, Yenigün said.

“The biggest advantage for us to have production in Russia will be to avoid the 10 percent import tax, which Russia charges for heavy commercial truck imports. Moreover, we will be able to sell heavy trucks to huge state-run companies in Russia, including Gazprom, which have to date purchased Russian brand trucks,” he said.

Ford Otosan aims to sell over 7,000 units in Russia annually by 2020.

Avtotor Holding, Russia’s first private vehicle manufacturer, has a 20 year history, said Avtotor CEO Valeriy Gorbunov.

Avtotor has an annual production capacity of 15,000 heavy trucks.

Ford Motor Company sold its European heavy truck unit to Iveco in 1986, and U.S. market heavy truck unit to Daimler in 1996. However, Ford continued to produce trucks in Brazil and Turkey.

With a Ford relationship dating back to 1928, Ford Otosan began producing Ford F-600 based conventional models in 1960, low-cab-forward D-Series in 1966, and Cargo Series commercial trucks from 1983.

Under the Global Cargo Agreement between Ford and Koc Holding, Ford Otosan is responsible for Ford's international market heavy truck development, production and sales.

Ford Otosan exports Ford vehicles to 106 countries around the world, including Ford heavy trucks to over 30 countries.

Ford Heavy Truck (Turkey): http://www.ford.com.tr/agir-ticari-araclar

Ford Heavy Truck (Russia): http://www.ford.ru/Heavys

Ford-Otosan - 2013 Annual Report: http://www.fordotosan.com.tr/downloads/yatirimciiliskileri/2013_Annual%20Report_.pdf

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[Red Horse]

They announce the deal Dec 11 and say they will be in business at end of the month! That says they had this in the works for months or it is MUCH easier to do business in Russia than in the US.

With the apparent eagerness of these guys to expand their business, I can't believe we are not seeing signs of them one way or another getting involved with Ford's renewed presence in class 7 (and maybe baby 8) when Avon Lake comes on line in few months. Not with those high cab versions but with the one that most closely resembles the old Ford Cargo.

KSC- I know the no compete has expired but was there anything in the Daimler deal that specifically blocked Ford from ever bringing the Cargo back to the US?

[kscarbel2]

KSC- I know the no compete has expired but was there anything in the Daimler deal that specifically blocked Ford from ever bringing the Cargo back to the US?

I assume that Ford gave Daimler exclusive usage rights to the (last generation) Cargo cab in the US market for 10 years. Ford sold Daimler the cabs (supplied by Ford Brazil).

But fast forwarding to the present, we have an all-new Cargo COE cab that Ford could sell in the US today.

[TeamsterGrrrl]

From what I've heard, the upcoming Super Duty mediums will include a tandem model, putting the line well into Class 8.

[Red Horse]

I assume that Ford gave Daimler exclusive usage rights to the (last generation) Cargo cab in the US market for 10 years. Ford sold Daimler the cabs (supplied by Ford Brazil).

But fast forwarding to the present, we have an all-new Cargo COE cab that Ford could sell in the US today.

thx

[Red Horse]

From what I've heard, the upcoming Super Duty mediums will include a tandem model, putting the line well into Class 8.

Hope you are right as it makes a lot of sense when you look at it from a "low hanging fruit" perspective. That is if Ford has the confidence in the 6.7 Power Stroke to get into GVW's above 33,000 lbs. Or if they don't will they do something with the 7.3 or 9L Duratorque or once again turn to cummins for the 8.3.

[41chevy]

Makes perfect sense, as Ford and Russia have a business relationship going back to the late 20's early 30's with the GAZ AA trucks until Stalin ended the deal.

[kscarbel2]

Makes perfect sense, as Ford and Russia have a business relationship going back to the late 20's early 30's with the GAZ AA trucks until Stalin ended the deal.

While Ford's current activities in Russia have no connection with that of the past (a short period from 1926 to 1938), the company has a solid heavy truck opportunity there.

Russia has superb truck engineers, however the truckmakers have no funding. With imported new European brands are too expensive for many operators, Russia has been a popular destination for second-hand European trucks.

Competitively powered by Iveco Cursor 11 and 13 liter engines, the Cargo should be able to price itself between the new and used European trucks.

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Henry Ford had made a name for himself in Russia with the introduction of the Fordson tractor there. Introduced in 1926, the Fordson tractor helped to quickly modernize the Soviet Union’s agricultural methods.

Although Ford had refused an offer to build a Fordson tractor plant in the Soviet Union, he did agree in 1929 to form a joint venture car and light truck plant.

The Soviet Union agreed to purchase $13 million worth of cars and trucks (72,000 CKD kits) and spare parts, while Ford agreed to guide the construction of a plant (in the city of Nizhny Novgorod to Moscow’s east) with a 100,000 unit annual production capacity, and provide technical assistance until 1938.

The joint venture was called NAZ (Nizhegorodsky Avtomobilny Zavod) and utilized the Ford logo. Production of Ford Model A cars and Model AA light trucks began in 1932.

In 1933, the joint venture’s name changed to GAZ (Gorkovsky Avtomobilny Zavod).

A Model AAA 6x4 truck was produced from 1934.

[kscarbel2]

[kscarbel2]