RUSSIA: GAZ Group could export parts to GM: Andersson
GAZ Group says it could export some parts back to General Motors as overseas automakers increasingly put their trust in the Nizhny Novgorod manufacturer.
Speaking at the launch of Chevrolet's Aveo production at GAZ Group's Nizhny Novgorod plant in Russia, CEO, Bo Andersson, raised the export possibility and the potential to add further capacity if needed.
The Aveo is being assembled on two shifts, with a hatchback version to be added to the GAZ production line at the end of next month. Planned annual output of both versions is 30,000 cars.
"With General Motors, we have an eight-year contract - we must earn that trust," said Andersson. "If we do that, I am sure GM will give us another vehicle - today we could add 15,000 units if we go to a third shift.
"We will [also] fulfil 30% of localisation as a first step and if everything goes right, we will get to 50%. But it is always a trade off between cost and benefits.
"With high volume and high investment parts, we will not be competitive, but on a lot of other parts, we will save a lot on logistics. In some areas, we could also export back to GM."
GAZ Group - part of Russian Machines and Basic Element - ended its its own passenger car production to concentrate on commercial vehicle manufacture, as well as contract building of models for General Motors, Volkswagen, Skoda and Mercedes Benz.
"Most people felt it was the wrong decision to step out of passenger cars," said Andersson. "I showed [Oleg] Deripaska [Russian Machines owner, Basic Element chairman] 20 years of decline.
"It was not an easy decision, but it was necessary. My short-term thinking was if you don't do something, you will just die."
GAZ is Russia's largest manufacturer of commercial vehicles, with 13 plants, producing around 50% of LCVs, 58% of medium-duty trucks and 65% of buses.
It also produces cars for Skoda - Yeti and Octavia - Volkswagen - Jetta - Chevrolet - Aveo and Mercedes Benz - Sprinter.
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