General Motors will begin production this month at a small facility in Russia, marking the next step in GMs expansion in central and eastern Europe.
Company insiders say GM wants to add up to 500,000 units of annual capacity in central and eastern Europe by the end of the decade.
Manufacturing in Russia will begin with semiknockdown kits at a facility in St. Petersburg, which will produce 4,000 units a year of the Chevrolet Captiva medium SUV.
GMs next step in Russia will be the construction of a E100 million greenfield plant in Shushary outside of St. Petersburg. That facility will have welding and painting operations for complete knockdown assembly of 25,000 vehicles a year by 2008.
GM initially will produce the Captiva and an unnamed small car at the new plant in Russia.
At the same time, sources say GM intends to negotiate with the Romanian government over the purchase of a car assembly plant in Craiova that would allow GM to boost production capacity for its Chevrolet brand.
Until recently the Romanian government held 49 percent of the Craiova plant. Now it is buying the remaining 51 percent from the Korean creditors of Daewoo Craiova.
Daewoo Motor owned the Craiova plant until the automaker went bankrupt in 2000. The plant was excluded from a 2002 deal in which GM bought most Daewoo assets to form GM Daewoo Auto and Technology.
GM could build the Chevrolet Matiz/Spark at Craiova, adding up to 200,000 units for the brand.
Separately, GM has already signed a memorandum of understanding for a joint venture with Ukrainian automaker UkrAVTO allowing GM to build the Aveo small car at a 300,000-capacity FSO assembly plant just outside Warsaw, Poland. GM insiders say the FSO plant could start building Chevrolets by year-end.
Currently, only about 15 percent of the FSO factory is used to build Daewoo Matiz and Lanos models for the Ukrainian and Russian markets.
Said a GM spokesman: As demand continues to grow in central and eastern European markets, we will continue to look for opportunities to build where we sell.
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You may e-mail Harald Hamprecht at [email protected]