Ford Motor Co. is hiring about 700 new workers at its van and sport-utility factory in Russia, a sign that the country's long-suffering car market is starting to see signs of growth.
Together with joint-venture partner and Russian car maker Sollers JSC, Ford will be adding a second shift to the factory in Elabuga by year-end, marking the first time it has expanded the plant's workforce since 2013.
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Demand for new cars and trucks is starting to perk up again after years of economic and political turmoil depressed new-vehicle sales in the country, once seen as a promising emerging market for car makers. Russian auto sales were up nearly 10% through August this year to nearly 1 million vehicles, according to the Association of European Businesses.
Despite the country's recent troubles, Ford has doubled-down on Russia, taking a controlling stake in the joint-venture two years ago and pouring new investment into it at time when rival General Motors Co. has largely retrenched from the European market, including closing a plant in Russia and halting sales of most products there.
In 2011, Ford acquired its joint-venture stake in Sollers for $364 million.
Ford executives are banking on the auto market's recovery in Russia to help give its once-troubled European operations a boost, helping to move them closer to a long-term goal of posting 6% to 8% margins in the region. Ford earned $1.2 billion in pretax profit in Europe last year and delivered an operating margin for the region of 4.2%.
Bob Shanks, Ford's chief financial officer, said during an earnings call in July that he sees Russia eventually becoming Europe's largest individual market and delivering to Ford "very good returns."
Ford has in recent years expanded its lineup in Russia, rolling out new models such as the Focus and Fiesta. It has also taken advantage of GM's pullout, offering "trade-in" bonuses to customers owning brands leaving Russia.
Ford builds the Kuga and Explorer sport-utility vehicles at the Elabuga plant, as well as the popular Transit van.
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(END) Dow Jones Newswires
September 14, 2017 14:21 ET (18:21 GMT)