Frost & Sullivan analyst Andriy Ivchenko is optimistic that GM’s decision to build the new Astra at its St Petersburg plant will underpin bright prospects for the firm in Russia in the medium-term.
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GM said last week that it will begin making the new Astra at its Russia plant next year.
“This is a logical step from GM to support dropping sales and to challenge traditional Opel competitors in Russia such as Ford, VW, Fiat, Renault, PSA, as well as the main Russian rival – AvtoVAZ,” says Ivchenko.
According to Frost & Sullivan estimates, the drop in sales of passenger vehicles in Russia is expected to reach more than 45% by the end of 2009.
Nevertheless, the researchers at F&S say that sales will bounce back and start growing again by 2010, which is a positive note for Opel.
By moving production from the Arsenal plant to the new $300 million production facility in St. Petersburg, GM can better refill underutilized production capacities, F&S maintains.
Although current forecasts indicate that Astra sales in Russia are expected to drop by almost half in 2009, F&S expects that Astra will enhance its position within Opel’s product line-up in Russia and generate almost half of the brand’s sales this year.
If Opel’s new owners successfully negotiate with the Ministry of Trade the inclusion of the Astra into the list of models subsidized by the Russian Government, then it will be possible to expect even better sales, F&S says.
In any case, the localisation of Astra production in Russia and favourable exchange rates provide Opel with the potential to support dropping sales, the firm adds.
Frost & Sullivan expects that Opel will remain among the top seven foreign car sellers in Russia by 2015, with the Astra and Corsa models driving regional sales of the brand.
“Further localisation of production in Russia is expected to be a good remedy for curing dropping market sales for Opel or any other brand interested in the Russian automotive market,” says Ivchenko.
See also: RUSSIA: New GM plant to build new Astra
