GM to invest $1 billion in Russia within 5 years
MOSCOW (Reuters) - General Motors Co (GM.N) plans to invest $1 billion over the next five years to expand car and component production in Russia, one of the fastest-growing auto markets in the world, its head of international operations Tim Lee said.
GM, which produces cars in Kaliningrad, St. Petersburg and Togliatti, will invest the money to increase output capacity and in sourcing local components, Lee said ahead of an annual auto show in Moscow.
The number of cars sold in Russia rose 40 percent last year to 2.5 million, reversing losses suffered after the credit crunch, with foreign brands produced in Russia jumping 70 percent to top 1 million.
Growth has slowed this year but remains in double digits, and foreign car makers such as GM - which ranks second in Russia by car sales - are looking to further ramp up production.
The Detroit-based group, which has bounced back from a spell in bankruptcy, started work in June on an expansion of its plant in St Petersburg, where it plans to more than double production to 230,000 vehicles per year.
The St Petersburg plant builds the Chevrolet Cruze sedan and the Opel Astra hatchback, and the expansion will add production of the Astra sedan.
Lee, speaking ahead of the opening of the Moscow International Automobile Salon, also said GM would expand production of the budget Chevrolet Niva sport utility vehicle, being made in a joint venture with Russia's AvtoVaz (AVAZ.MM).
Production of the Chevy Niva would rise to 120,000 from 70,000, bringing total production of GM brands in Russia to an annual 350,000 vehicles.