GAZ Group investor and Basic Element chairman, Oleg Deripaska, says he does not believe the Russian manufacturer will go near to taking a stake in a European auto business.

Deripaska's comments follow last November's agreement between Russian Railways (RZD) and PSA Peugeot Citroen subsidiary, Gefco, to acquire 75% of the logistics division in an EUR800m (US$1.07bn) deal.

"I would not advise GAZ to buy at the moment in European automotive," Deripaska told just-auto from Moscow. "There is of course, critical components Russia needs, but with the high Euro, we need to be practical.

"High Euro and issues with the labour market in Europe - I would not believe we go near to buy something in Europe at this moment."

RZD president, Vladimir Yakunin, said the rail operator's move into Gefco would drive the development of freight activity between Asia and Europe, with Russia, Belarussia and Kazakhstan expecting to form a common rail logistics business.

Deripaska insists his focus lies closer to home despite the domestic challenges of high interest and capital costs and will look at existing capacity.

"We have high cost of capital and high interest rate, which creates advantages for importers," he continued to just-auto. "Our main focus is to utilise our capacity.

"I could not say for our products and our customers we can add anything significant by buying operations in Europe. We would rather add Asia with available capital and finding cheap inner cost."

GAZ - part of Russian Machines and Basic Element - started Chevrolet's Aveo production last week at its Nizhny Novgorod facility 250mi east of Moscow and also produces vehicles for Volkswagen and Skoda.

General Motors and GAZ Group inked the deal in 2011 to produce the Aveo in Russia, with the companies investing US$29m to ramp up the existing Nizhny Novgorod passenger car production facility.