General Motors Co. is hoping that its production partnership with GAZ Group will help Chevrolet retain its spot as the top-selling foreign brand in Russia.GAZ commenced building the Aveo sedan Tuesday and will start producing its hatchback variant in late March. GAZ aims to produce 30,000 Aveo subcompacts in 2013.
Jim Bovenzi, president of GM Russia, said in a statement that Chevrolet was the most popular foreign car brand in Russia for the sixth year in a row. Their strategic goal is to further boost Chevrolet's position in the Russian market. GAZ is assembling the Aveo from complete knocked down (CKD) kits on two shifts at its Nizhny Novgorod site, located around 400km east of Moscow. GM and GAZ invested around $29 million to prepare the plant for the Aveo.
The assembly of the Aveo is done by GAZ’s employees who received training at GM plants in Korea and St. Petersburg, Russia. According to data from the Moscow-based Association of European Businesses, Chevrolet was the best-selling foreign brand in Russia in 2012, selling 205,042 vehicles. The brand was followed by Renault, which sold 189,852 units in Russia in the year.
Local brand Lada remains as the top-selling brand in the country, with 537,625 units sold in 2012. Lada is part of AvtoVAZ, which is currently controlled by Renault-Nissan. The GM alliance is part of the turnaround strategy crafted by Bo Andersson, GAZ Group chief executive.
Andersson, a former purchasing chief at GM, arrived at GAZ in 2009, and managed to halt unprofitable car production at the Russian carmaker by winning contract manufacturing deals with the GM, Volkswagen Group and Daimler. GAZ assembles the Yeti for VW Group’s Skoda. GAZ will begin this year the production of the redesigned Skoda Octavia hatchback and VW Jetta sedan. GAZ’s total production for VW is expected to reach 110,000 units a year.