GM to Increase Production in Russia

As the Russian automotive industry is proving that the predictions made about its evolution were not mere hearsay, the carmakers who are conducting business there are doing their best to keep up the pace with the booming market.

Building on those predictions, big names of the industry, like American giant GM, are beginning to make audacious plans for the future, plans that no more than two years ago would have seemed like the insane gamble of an addict.

By end of the decade, GM wants a considerable size of the Russian market share, so it now plans an increase in production in the country more than twice, to a total of 350,000 units each year. And it will do that, says GM, by only using the production lines and joint ventures it currently has in Russia.

GM's main plant in the country, the one in St. Petersburg, will become the spearhead of the GM offensive, with a huge increase in production from 60,000 units to 230,000. The joint venture GM operates together with AvtoVaz will make up for the difference, increasing its output from 90,000 units to 120,000.

According to Jim Bovenzi, GM Russia's managing director, despite the fact that the automaker has been looking into ways to boost its output, no other viable joint venture opportunities have been found (GM has some type of tie-up or another with Avtotor and GAZ as well). Also, in order to reduce the cost of the expansion plans, GM intends to buy no other operation in Russia.