General Motors’ head of international operations Tim Lee confirmed plans for a $1 billion investment over the next five years to increase the production in Russia of cars as well as components. Lee said that the market in Russia has one of the fastest growths in the world. Lee said that GM will increase its production capacity in Kaliningrad, St. Petersburg and Togliatti.
It also aims to boost its sourcing of components locally. In Russia last year, car sales had increased by 40% to 2.5 million, reversing losses experienced after the credit crunch, with foreign brands built in Russia going up by 70% to exceed 1 million. The pace of growth has slowed down but it is still in double digits. Foreign carmakers like GM, which is No. 2 in Russia in terms of auto sales, want to increase production.
GM began its expansion project last June of the factory in St. Petersburg, where it aims to more than double production to 230,000 vehicles annually. The plant produces the Chevrolet Cruze sedan and the Opel Astra hatchback.
Part of the expansion includes the boost in Astra sedan production. Furthermore, Lee said that GM will increase the output of the budget Chevrolet Niva sport utility vehicle, which is a joint venture with Russia's AvtoVaz. The Niva production would increase to 120,000 from 70,000, raising the total production of GM brands in Russia to 350,000 vehicles each year.