To boost its presence in the fast-growing Russian market, General Motors Co. will assemble 30,000 of its Chevrolet cars at Russian group GAZ's facility. GM said production would begin with a goal to start selling the Aveo small-segment car in 2012.
Chevrolet Russia managing director Alexander Moinov said that costs have to be kept low and the company has to remain competitive with other manufacturers.
Part of businessman Oleg Deripaska’s Basic Element group, GAZ had been in talks with Volkswagen AG about becoming partners.
Bo Andersson, GAZ CEO, told Reuters a deal with VW has yet be signed and added that the contract (with GM) does not rule out the possibility of working with other car manufacturers.
Russia had been set to become Europe's biggest car market before the economic crisis caused sales to halve in 2009; however, analysts expect a return to pre-crisis levels by 2012.
Western carmakers have been striking partnerships with Russian carmakers in the past three years as they seek to tap into a market that is expected to grow 17 percent in 2011 after 30 percent growth in 2010. Renault S.A. has a 25 percent stake in Lada maker AvtoVAZ. Meanwhile, Daimler AG has entered a deal with Kamaz and Fiat S.p.A. with Sollers.