August 9, 2013 / 9:00 AM / in 4 years

Ford's Russian venture to reduce production at one plant

Russia's Prime Minister Vladimir Putin (C) talks to Ford of Europe company Chairman and CEO Stephen Odell (L) and Sollers company General Director Vadim Shvetsov during a signing ceremony in Moscow June 8, 2011.Alexei Nikolsky/RIA Novosti/Pool

MOSCOW (Reuters) - Ford Sollers, a joint venture between U.S. automaker Ford Motor Co (F.N) and Russian carmaker Sollers (SVAV.MM), is to reduce production at its Vsevolozhsk plant near St Petersburg, the company said on Friday.

Ford Sollers said there had been a change in customer purchases, with a reduction in demand for "C-segment" cars, referring to compact cars such as its Ford Focus, but a rise in demand for SUVs. The Vsevolozhsk plant makes Ford Focus and Ford Mondeo models but no SUVs.

The Vsevolozhsk plant will suspend production for a total of 20 days during August and September, and from September 30 it will move from three to two shifts per day, the company said, confirming an earlier report in Vedomosti newspaper.

The plant has asked union representatives to discuss the reduction of employees from its more than 2,700 staff.

Formed in late 2011, the Ford Sollers venture also has production facilities in Tatarstan and produces eight models in total in Russia including several SUVs. Its models are: Ford Kuga, Ford Explorer, Ford S-MAX, Ford Galaxy, Ford Transit and Tourneo Custom, as well as the Focus and Mondeo models.

"In response to the market, Ford Sollers continues to grow production of SUVs and commercial vehicles, to grow its presence in these fast growing segments," the statement said.

Russian car sales fell for the fifth straight month in July, according to the Association of European Businesses (AEB), a business lobby that groups Europe's top automakers said on Thursday.

Car sales have been falling as Russia's $2 trillion economy has faltered, causing the AEB to cut its forecast for the full year to 2.8 million units, a fall of 5 percent.

Reporting by Megan Davies; editing by Maria Kiselyova and Jane Merriman

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