Fiat Signs Letter of Intent with Russia's Sberbank

The Russian bank intends to finance the project and also take a minority equity interest of up to 20 percent in the Joint Venture.

The product range is expected to be based on Jeep vehicles and could subsequently be expanded to include other models and engines which will be produced and assembled locally.

Production capacity of 120,000 vehicles will be established. Total investment in the project could reach €850 million.

The project encompasses a main plant - the preferred option for now is to locate it in the St. Petersburg area - and also the assembly of vehicles, SUVs and potentially light commercial vehicles in Moscow via contract manufacturing to be entered into with ZIL (Zavod Imeni Likhachova) thanks to the cooperation with the Government of Moscow.

Chrysler Group LLC, in which Fiat S.p.A. holds a 58.5% stake, may also participate in the project as an investor, as well as licensing production of some of its models.

Parties will continue discussions and will seek for all customary corporate approvals, ahead of entering into binding agreements, which will be finalized during the first half of 2012.