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Skoda : Production envisaged in Russia Letter of Intent concerning production of Škoda passenger cars in Russia A Letter of Intent was signed by the governments of Czech Republic and Udmurtian Republic in Russia. DM 500m will be invested in a target annual production capacity of at least 80,000 Škoda cars. The Letter of Intent relating to automobile production of the traditional Czech brand Škoda in Russia was signed on December 17, 1998, in Moscow, by the Deputy Prime Ministers of the two countries, Yurii Maslyukow and Pavel Mertlík. The project is to start as early as next year with the assembly of several thousand Škoda Felicia automobiles and involves founding a joint venture by Škoda Auto of Mladá Boleslav, Czech Republic and the automobile manufacturer Izhmasch of Izhewsk in the Udmurtian Republic (approx. 1350 km east of Moscow). Škoda Auto, which is to hold the majority of shares in the joint venture, plans to invest DM 500m in the project. This should allow future production to be raised to a minimum of 80,000 cars a year within a few years. Implementation of the project was made possible by a decree, which President Boris Yeltsin issued this year to support foreign investments in the Russian automobile industry. Having sold nearly 10,000 cars in 1997, Škoda Auto became one of the most important exporters of fully-built cars to Russia. Hopes and plans to improve upon this result in 1998 were dashed by this year’s Russian financial and economic crisis.
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