Nissan Opens First Russian Plant

ST. PETERSBURG, Russia (AP) -- Prime Minister Vladimir Putin and Nissan Motor Corp. president Carlos Ghosn presided over the opening Tuesday of the Japanese car maker's first plant in Russia, banking on the revival of the country's car industry despite the global financial crisis.

The Russian car market was on track to become Europe's largest before the crisis struck, and foreign automakers had been looking to Russia to compensate for flagging sales in the more saturated West.

Those hopes have been dimmed as Russia's economy has been battered by the financial crisis, but Nissan President Carlos Ghosn said Russia remained the Japanese car maker's No. 1 market in Europe and No. 5 in the world.

"Our success in Russia will directly depend on the support of the Russian government and people," Ghosn said.

Nissan sold 146,000 cars in Russia last year, a 26 percent increase over 2007, he said. The new plant, which cost $200 million, is initially expected to produce 50,000 cars per year.

All car sales in Russia rose 26 percent in 2008 -- continuing a trend of several years -- but were down 53 percent in April and 44 percent in the first four months of the year.

The Russian government has offered substantial incentives to foreign producers to set up assembly plants or manufacture auto parts in Russia. Ford, Renault, Scania, Toyota, Volkswagen and GM have all opened plants within the past six years.

Putin, who test drove the first Nissan Tiana to roll off the production line, said his government "will continue to support any investment, first of all direct investment and especially if it is connected to innovation and new technology."

Russia is eager to reverse a sharp decline in foreign investment, which dropped 43 percent in the first quarter of this year.

Putin also welcomed the 750 jobs created by the new Nissan plant. Nissan expects more than 5,000 additional jobs to be added by suppliers and other partners when the plant begins operating at full capacity, Ghosn said.

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