GM doubling capacity at St Petersburg factory

 

GENERAL MOTORS, facing continued losses in western Europe, is more than doubling capacity at a factory in St Petersburg that will make the new Opel Astra saloon as the Russian car market rebounds.

“We’ve got to bring our best game, our best products, to this market,” chief executive officer Dan Akerson said yesterday.

GM is introducing 12 new vehicles in Russia this year after increasing combined Chevrolet, Opel and Cadillac sales in the country by 53 per cent last year to 244,000.

GM is making the effort as competitors also stake out claims to the fast-growing market as western Europe struggles with a fifth straight year of declining vehicle sales.

Mr Akerson is trying to fix Opel, which will add five models in Russia, while expanding GM’s Chevrolet and Cadillac brands globally.

Mr Akerson spoke before a planned ceremony in Russia for the groundbreaking of GM’s factory expansion in St Petersburg.

The addition, part of a planned $1 billion investment over the next five years in the country, will more than double the facility’s annual capacity to 230,000 vehicles by 2015, and increase GM’s Russian capacity to 350,000.

The Russian auto market reached 2.9 million vehicles in 2008 before falling to 1.5 million in 2009, according to PricewaterhouseCoopers.

Vehicle sales in the country, which gained 39 per cent to 2.65 million last year, will probably increase to more than 3 million this year or next, Mr Akerson said.

“We’re going to push north of 10 per cent share this year,” Tim Lee, president of GM’s international operations, which includes Russia, said during an interview in April, referring to the company’s market share targets in Russia. “We’re selling 300,000 units” this year.

GM held 9 per cent of the market in 2011, according to a filing.

GM announced last week that it wanted to close its Bochum, Germany, assembly plant and to delay pay raises to workers as part of efforts to stem European losses, which have totalled $16.4 billion since 1999. The company is in talks with unions about the proposed closure. – (Bloomberg)