Fiat confirms plans to invest $1.1bn in Russia

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Image caption Fiat's target is to sell 6 million cars annually by 2014

Fiat has signed a deal that could see up to to 850m euros ($1.1bn, £720m) invested in Russian plants.

Russia's Sberbank will provide financing and plans to take a stake in the project of up to 20%.

Fiat will start with a range of cars based on Chrysler's Jeep brand and then expand to other models and engines.

The plan is to build a plant in the St Petersburg region and assemble cars in partnership with Russia's ZIL in Moscow.

With a target production of 120,000 cars a year, Fiat has scaled down its plans for Russia.

It had hoped to produce 500,000 cars a year in a joint venture with Russia's Sollers.

But that deal fell through last year when the Russian firm replaced Fiat with Ford.

A subsequent plan to produce 300,000 cars was described by Russia's economic development ministry as unrealistic.

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