CNH, a world leader in the agricultural and construction equipment businesses, and part of the Fiat Group, and Kamaz JSC, a leading global heavy truck manufacturer, last week announced the development of an industrial and commercial alliance to further strengthen CNH’s position in Russia’s agricultural and construction equipment sectors.
The alliance, framed as a Heads of Agreement, was signed in the presence of Vladimir Putin, Prime Minister of the Russian Federation and Sergey Chemezov, general director of Rostechnologii; Sergej Kogogin, general director of Kamaz and Sergio Marchionne, CEO of Fiat Group; Franco Fusignani, head of CNH International; Alessandro Nasi, vice president of CNH business development. Definitive agreements are to be completed by the parties in the coming months.
Under the partnership, the two companies would set up an industrial joint venture aimed at initially localizing the production of CNH’s brands’ combines, tractors, implements and specific construction equipment models. Manufacturing operations will be located in Naberezhnye Chelny, Tatarstan, the historical headquarters of Kamaz, and are planned to commence in 2010. This operation will also serve as the manufacturing base for the local assembly of products.
According to the definitive agreement, CNH and Kamaz will integrate their networks in order to distribute in the Russian Federation both localized and imported agricultural and construction equipment belonging to CNH brands’ full line of product ranges. The commercial joint venture will benefit from Kamaz’s dealer network in Russia and from CNH’s strong product, brand recognition and distribution presence in the Russian market, leveraging its global resources and organization.
“This agreement is a strong sign of our long term commitment to Russia,” said Sergio Marchionne, CEO Fiat S.p.A. and chairman of the board, CNH Global N.V. “To these joint ventures, CNH would bring technological know-how, an existing distribution network, retail finance and leasing solutions and access to an extensive supply base and relevant economies of scale. CNH has a strong presence in the Russian market that is supported by our recognized leading brands and their wide-ranging product lines.”
CNH operations in Russia date back to 1907, the year in which the first Case tractor was shipped to the country. At the beginning of 2009, CNH opened a new spare parts depot center near Moscow.
Kamaz Inc. is the largest Russian manufacturer of heavy-duty trucks.