( RIA Novosti ) - Russia's largest car manufacturer AvtoVAZ and Italy's Fiat Group have signed a memorandum on mutual understanding and cooperation, the Russian company said on Monday.
A statement from AvtoVAZ said that the signed document deals with engineering and technological processes, designing, production and supplies of assembly parts, engines and other components.
In line with the memorandum, the companies will form working groups to determine the possibilities of cooperation and its specific conditions in both the short- and long-term, and also plan the signing of concrete agreements in the coming months.
Sergei Chemezov, the chairman of the board of the Russian company and the head of state arms exporter Rosoboronexport, which holds a blocking stake in AvtoVAZ, said "the concluded memorandum is the most important stage of the Russian and European cooperation in the sphere of car manufacturing."
AvtoVAZ initially announced its intention to cooperate with Fiat in the production of cars and engines in late June, but Fiat said at the time that no negotiations were underway.
Last year, AvtoVAZ posted net profits of 2.5 billion rubles ($99 million), up 15%, year-on-year. The company expects revenues of 166 billion rubles ($6.5 billion) in 2007.