General Motors wants to take annual production in Russia to more than 350,000 vehicles a year by 2020.
To get there, the company will increase production at its plant in St Petersburg to 230,000 units from 60,000 units currently and expand the capacities of its joint venture with Russia’s AvtoVAZ to 120,000 units from 90,000 units.
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But GM does not plan any further joint ventures in the country, Jim Bovenzi, president and managing director of GM Russia said, according to business daily Vedomosti.
Since the beginning of the year, GM had been studying various options to expand in Russia, he said. These included joint ventures or acquisitions. But the company has now decided that the best cost option was to expand independently.
GM had been discussing creating a joint venture with the Kaliningrad-based Avtotor, which already produces some GM vehicles, and with the Nizhny Novgorod-based GAZ Group which already has an agreement to assemble the Chevrolet Aveo cars at its Gorky factory.
But GM will continue investing in Avtotor, where the Lacetti is assembled, said Avtotor’s CEO Valery Gorbunov. Avtotor funded the installation of a new Lacetti paint line with a capacity of 50,000 vehicles per year while GM paid for the welding line. Similar funding arrangements would happen if GM decided to expand further Avtotor’s capacity.
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By GlobalDataAvtoVAZ plans to develop its joint venture with GM, where the two companies hold 41.6% each, with its own funds, according to AvtoVAZ.
