Japanese automaker Toyota Motor Corp. on Tuesday broke ground on a new assembly plant in Russia, in a vote of confidence in the booming Russian consumer market despite investors' jitters over the Yukos case.
President Vladimir Putin, who attended the ceremony marking the start of construction for the new plant just outside of Russia's second-largest city, St. Petersburg, said he welcomed Toyota's first car-making enterprise in Russia.
Officials said initial investment will total 4 billion rubles ($140 million) in the factory, which will produce about 50,000 Camrys and other models annually.
But economic minister German Gref said Toyota could invest $250 million over two years and a total of $1 billion into the plant over the long-term.
Former Japanese Prime Minister Yoshiro Mori, who also presided over the ceremonies, said the high-profile project could encourage more investment from Japan.
"The arrival of Toyota Motor to the Russian market is a symbol of expansion for Russian-Japanese economic relations," he said, speaking through a translator. "If this project is successful, other Japanese enterprises will be coming to Russia."
Toyota is the latest foreign automaker to start up a production facility in Russia. France's Renault SA earlier this year opened a $250 million assembly plant for the Logan model in Moscow.
Foreign investors have been spooked by the politically charged assault on billionaire oil tycoon Mikhail Khodorkovsky and his Yukos oil empire, which raised doubts about the rule of law and protection of property rights in Russia.
Khodorkovsky received a nine-year jail term for fraud and tax evasion and Yukos' main unit was dismantled last December to pay off a $28 billion back taxes bill.