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GM Phasing Out Most Operations in Russia
General Motors Co. will close its assembly plant in St. Petersburg, Russia, at mid-year and phase out its Opel brand in the country by the end of 2015.
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General Motors Co. will close its assembly plant in St. Petersburg, Russia, at mid-year and phase out its Opel brand in the country by the end of 2015.
The company also will stop local assembly at GAZ of Chevrolet-brand vehicles from kits. The company's GM-AvtoVAZ venture will continue to make and sell the current Lada-based Chevrolet Niva small SUV.
GM says it will serve the Russian market in the future by importing luxury Cadillac models and high-end Chevrolet vehicles such as the Corvette sports car, Camaro sport coupe and Tahoe large SUV.
GM plans to take a special charge of about $600 million (€566 million), most of it in the first quarter of 2015. Charges will include sales incentives, dealer restructuring and canceled contracts.
Opel CEO Karl-Thomas Neumann says the decision to shut down operations in Russia was prompted by poor sales and an insufficient local supply base.
Last year GM's sales of Chevrolet and Opel vehicles fell 29% to 123,200 units and 20% to 65,000 units, respectively, according to the Moscow-based Assn. of European Businesses. Sales through the first two months of 2015 plummeted 71% for Chevrolet and 82% for Opel.
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