FORD DECELERATES PLAN FOR RUSSIA PRODUCTION DEAL \ CARMAKER UNSURE ON IMPORT DUTY PACKAGE

FORD DECELERATES PLAN FOR RUSSIA PRODUCTION DEAL \ CARMAKER UNSURE ON IMPORT DUTY PACKAGE

Ford Motor Co. has decided to slow down a plan to invest $150 million in production of the budget-priced Ford Fiesta model near St. Petersburg.

The reason, Ford officials said, is that recent changes in the Russian government leave the company uncertain about whether the project will qualify for the same import duty privileges offered to other, bigger auto production investors.Last week, Alex Trotman, Ford's chairman, disclosed that the company was having second thoughts about the plan. Russian officials expressed surprise at his announcement.

The Ford plan had called for initial production of 25,000 cars a year at a plant in Vsevolzhsk owned by Russkiy Diesel.

Unlike Ford's plant in Belarus, which opened in July 1997, the new facility would have its own production capacities for welding, assembling and painting. The company has been expecting to negotiate duty relief on components that will be imported for the Fiesta line.

Ford officials said for the record, ''We are continuing to move forward, but at a slower rate than expected.''

To be eligible for Russia's offer of tariff cuts, Ford would have to make a minimum project investment of $250 million.

Ford officials said they are also cautious because of uncertainties surrounding the company's customs package in neighboring Belarus - even though Ford said the Belarus government had resolved concerns the carmaker had expressed recently.

Anna Beauchamp, spokesman for the Ford sales office in Moscow, said Belarussian assembly of Ford Transit and Escort models is running on target at 6,000 units a year, with about 90 percent of sales in Russia.

''We are meeting our target of selling 25 Belarus units per day in Russia,'' she added.

Overall, Russian sales for Ford are already up more than 30 percent this year, compared with the same period of 1997.

But Ford acknowledged that the changeability of Russian officials and their investment incentives policies have prompted the slowdown in the Russian investment plan.

Russian officials said they will respond publicly later this week, when the State Customs Committee keynotes a conference in Moscow devoted to foreign trade concerns.

Ford is also reported to be considering whether to take over the assembly facilities in Kaliningrad of financially ailing Kia Motors of South Korea.

Ford rival General Motors, which established the first American auto assembly plant in Russia at Yelabuga, in the Tatarstan republic, has announced that it has struck a tax deal with the local authorities that justifies significant expansion. The plan, GM and Tatarstan officials said, is to start assembly of Opel Vectra models in 1999 and gradually move to domestic sourcing of components.

Although GM's joint venture at Yelabuga is lagging behind target in the assembly of Chevrolet Blazers, the new plan reportedly aims to produce 50,000 Blazers and 80,000 Opel Vectras annually. Currently, only 4,000 Blazers are turned out each year from the Yelabuga plant.

Capitalizing on Tatarstan's special revenue-sharing arrangement with the Kremlin, GM has negotiated for a tax holiday covering local and regional taxes and other obligations.

GM is still negotiating for another Opel assembly venture with the AvtoVAZ plant in Togliatti, in southern Russia. That calls for production of the Opel Astra model.