TURIN, Italy -

Fiat recently revealed it will be expanding into Russia, first pushing Jeep vehicles into the eastern country.

The OEM signed a letter of intent with Sberbank in relation to a new project for the production and distribution of passenger and commercial vehicles in Russia, officials explained.

And the Russian bank plans to finance the project and also take a minority equity interest of up to 20 percent in the joint venture.

Chrysler Group — in which Fiat S.p.A. holds a 58.5 percent stake — may also participate in the project as an investor, as well as licensing production of some of its models.

“The product range is expected to be based on Jeep vehicles and could subsequently be expanded to include other models, and engines which will be produced and assembled locally,” the company noted.

First, production capacity of 120,000 vehicles will be established, and total investment in the project could reach 850 million euros.

The company also delved into the details regarding where the units are to be built.

“The project encompasses a main plant —  the preferred option for now is to locate it in the St. Petersburg area — and also the assembly of vehicles, SUVs and potentially light commercial vehicles in Moscow via contract manufacturing to be entered into with ZIL (Zavod Imeni Likhachova, a major Russian truck and heavy equipment manufacturer)  thanks to the cooperation with the Government of Moscow,” officials explained.

Officials concluded by noting that all parties will continue discussions and will seek for all customary corporate approvals, ahead of entering into binding agreements, which will be finalized during the first half of 2012.