Dodge Caliber Reportedly To Be Built in Russia in GAZ/Chrysler Deal

MOSCOW — The Dodge Caliber is Chrysler's top-selling vehicle in Russia, and now the compact car may be built there as well. Chrysler and Russia's second largest automaker, GAZ Group, are in talks to use idle capacity at the Gorkovsky Automobile Plant to assemble Calibers, local media are reporting.The partnership talks, if successful, could open the door for a strategic partnership agreement and enable Chrysler to overcome its weak financial position while strengthening its foothold in one of the world's fastest-growing car markets, analysts said.'A strategic alliance would allow Chrysler to reduce its reliance on the North America market, while GAZ Group would benefit from an injection of modern automobile production technology and funds,' said Marina Irkly, an automobile analyst with Moscow-based Veles Capital Investment Company.Flagging sales have forced Gaz, which produces commercial vehicles, to cast a wide net for strategic partners that would help overhaul its Volga passenger-car assembly line.The company has lately held partnership talks with Western automakers including General Motors and Chrysler. GAZ has said Chrysler is a possible strategic partner, and that both sides could assemble the entire range of its cars in Russia.The Dodge Caliber's sales soared a record 82 percent in Russia in the first half of 2007 alone. However, the American automaker sold just 2,800 Dodge Calibers between January and June 2008, landing it at an unenviable 32nd place on local dealers' list.In July, the GAZ Group launched serial production of the Volga Siber, a version of Chrysler's Sebring model, utilizing the modern manufacturing equipment it acquired in 2006 from Chrysler. Analysts have noted, however, that sales for the company's Volga passenger cars have since lagged and commented that the Volga Siber vehicle on a Chrysler platform could hardly sustain viability beyond 2012.GAZ is also eyeing a partnership deal with General Motors which could offer several inexpensive car models, including Korean-made Chevrolets. GM sold 114,500 Chevrolets in the country in the first half of this year, becoming a market leader in foreign-car sales.Magna International, Canada's largest automobile parts manufacturer, is expected to partake in any future joint venture between GAZ and Chrysler, supplying the bulk of car components. The Canadian company has also considered assembling Chrysler vehicles in Russia.The company announced in June that it would follow through on a November 2006 agreement with GAZ to launch the production and logistics of automobile parts and components in Nizhny Novgorod in the mid-2008.What this means to you: Players continue to sort themselves out in the quickly changing Russian automotive playing field. — Tai Adelaja, Correspondent

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