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RUSSIA: Car maker may reconsider GM co-operation

By just-auto.com editorial team | 22 December 2005

Russia's largest car producer AvtoVAZ may reconsider its cooperation strategy with General Motors at the next board of directors meeting, the Russian company's president and general director Igor Yesipovsky told a press conference on Thursday, the Prime-Tass news agency reported.

GM-AvtoVAZ, which is a joint venture between the two companies, is currently making no profit, Yesipovsky said.

The chairman of the board of directors of AvtoVAZ Vladimir Artyakov told the same press conference that the company may buy licences from world car makers to produce certain car components, however, the company should concentrate on the production of low-cost Russian cars, he added.

Prime-Tass said GM-AvtoVAZ was launched in 2002. GM and AvtoVAZ both hold 41.5% stakes, while the European Bank for Reconstruction and Development, or EBRD, has a 17% stake.

GM-AvtoVAZ produces Chevrolet Niva sport-utility vehicles (SUVs) and Viva cars in Russia.

In 2004 GM-AvtoVAZ produced 57,737 cars, up from 21,839 in 2003.

AvtoVAZ currently controls around 70% of Russia's domestic passenger car production and accounts for 40%-42% of total passenger car sales in terms of volume.

In 2004 AvtoVAZ' output increased 2.5% year on year to 718,000 cars, the report added.