A new joint venture between Fiat S.p.A. and Russian Sollers will be backed by $2.76 billion in subsidized loans from state-controlled Russian banks to revive the nation's faltering automotive industry.

Speaking to reporters on Thursday, February 11, 2010, Prime Minister Vladimir Putin expressed support for the plan, which essentially puts the Russian government in the position of bank-rolling the development of the new auto group.

On the same day, Fiat and Sollers confirmed the joint venture, with a target production of 500,000 Fiat and Chrysler vehicles in Russia on an annual basis.

The new partnership follows a deal by Renault that resulted in the purchase of 25 percent of AvtoVAZ from 2007 to 2009. Daimler AG of Germany also holds an 11 percent stake in KAMAZ, a Russian truck maker.

In 2009, the global economic recession sent the major Russian automakers into debt, leading them to seek foreign partnerships and government assistance to regain profitability.

Fiat, which controls Chrysler, is taking a gamble on the recovery of the Russian auto industry. The company believes that 3.4 million cars will be told in Russia by 2016. Only 1.47 units moved in the country in 2009.

Current figures indicate that auto sales remain down 37 percent in Russia under January 2009 levels.