GAZ Group says it has "moved the needle twenty years" with the launch of Chevrolet's Aveo model for the Russian market.

Speaking at the production start yesterday (5 February) at the Nizhny Novgorod plant 255 miles east of Moscow, GAZ president and CEO, Bo Andersson, highlighted the importance of the model to the company's Russian fortunes.

"Why is this important for GAZ?" said Andersson. "It is very [clear] for me we were far behind in passenger cars. As a consumer in Russia, you can pick 550 models. During the co-operation with GM and Volkswagen, we moved the needle 20 years by building the Chevrolet Aveo and three vehicles for VW.

"The challenge is GM has other plants building the same vehicle and that means it is very easy for them to measure us in the quality of assembly. We measure it every day."

GAZ's foray into passenger vehicles means it will employ 700 new staff for the Aveo, while thousands more will work on VW products and for Daimler.

"This is a relatively small operation," said Andersson. "We had this building and it required relatively little innovation. This is low technology with the benefits of flexibility."

Yesterday's launch will see GAZ aim for annual production of 30,000 vehicles to be sold on the Russian market, although the automaker is not excluding future expansion to CIS markets and potentially, Europe.

General Motors and GAZ Group signed an agreement in February 2011 to produce the Aveo at GAZ for sale in the Russian market, with both companies investing US$29m to prepare the existing GAZ passenger car production facility for the project. 

The Aveo is being assembled on two shifts, with a hatchback version being added to the GAZ production line at the end of next year. Planned annual output of both versions is 30,000 cars.

Aveo production in Nizhny Novgorod is final assembly from CKD (completely knocked down) kits. GAZ is carrying out welding, painting and assembly. It is using 43 welding robots and 33 welding jigs developed at GM Korea.

See also: RUSSIA: First Chevrolet Aveo off GAZ line