On the same day as its European labour leaders were reported to be readying a wave of strikes to protest against what they see as the car maker’s systematic drive to shift output and jobs away from expensive western Europe plants, General Motors announced it would build a ‘green field’ manufacturing facility in the Shushary region of St. Petersburg, Russia.

The plant would go on stream in late 2008 with initial full-year capacity of 25,000 units, GM said.

It would produce Chevrolet Captiva SUVs and a new generation of compact cars from CKD kits supplied by GM-Daewoo in South Korea.

Starting in September this year, a separate SKD facility in St. Petersburg will begin assembling the Captiva until the Shushary facility begins production. The SKD operation will have annual capacity of over 4,000 units.

Total investment in the new facilities is $US115m.

At a ground-breaking ceremony in Shushary on Tuesday, General Motors chairman and CEO Rick Wagoner said: “This project clearly demonstrates our commitment to Russia as one of the world’s fastest growing auto markets. With the addition of this new, wholly-owned facility, GM and its partners will be able to assemble more than 100,000 cars a year in Russia.”

The new assembly plant on the outskirts of St. Petersburg will employ more than 700 people who will be recruited specifically for their ability to set up and operate a world-class production facility.

“It is my fervent hope that General Motors has blazed a trail that its suppliers will soon follow to enjoy the benefits the St. Petersburg region offers,” said St. Petersburg governor Valentina Matvienko.

The ground-breaking ceremony for the new plant coincides with record sales for GM in Russia. More than 11,000 registrations in May was an 80% increase over May 2005.

“With five brands on the market, we offer Russian customers more choice than any other manufacturer,” said GM Europe president Carl-Peter Forster.

“The St. Petersburg plant and the new Chevrolet cars it builds will give us another boost in this very important market.”

Chevrolet is GM’s best-selling brand in Russia, with sales of over 35,000 in the first five months of the year. In 2005, Chevrolet was the number two non-domestic brand on the Russian market, taking over the number one position in the month of April this year.

GM has been active in Russia since 1992. The St. Petersburg project complements existing GM operations in Togliatti and Kaliningrad. Established in Togliatti in 2001 as the first joint venture on the Russian automotive market, GM Avtovaz builds the Chevrolet Niva and Viva. GM, with partner Avtotor, began SKD operations in Kaliningrad in 2004 and now assembles Cadillac, Hummer and Chevrolet models.

Russia, with a population of 143m, is one of the most dynamic car markets in the world. Year-on-year sales growth has accelerated from 9% in 2005 to 17% in the first four months of this year. Vehicle ownership has now reached a ratio of 178 cars to 1000 people.