DETROIT -- Bo Andersson, the one-time General Motors purchasing and supply chain chief, now is learning the headaches of running an automaker as CEO of GAZ Group, Russia's second-largest automaker.
GAZ is “a very strong market player in all segments of our business ... except passenger cars,” Andersson, 54, told the Automotive News World Congress on Wednesday.
The cars that GAZ Group builds barely make a profit, while its heavy trucks and construction vehicles generate double-digit profits, he said.
Andersson joined GAZ last year. His boss is Oleg Deripaska, a wealthy Russian investor.
Andersson called the effort to turn GAZ around a “struggle.” The company is burdened with nearly $1 billion in debt.
Still, he called Russia a land of great opportunity. There are only 216 vehicles per 1,000 people, much lower than the 770 per 1,000 in the United States.
GAZ also has excessive capacity in the massive factories that form Andersson's auto empire. The company's manufacturing footprint encompasses 15 plants, the biggest being the Nizhny Novgorod site. It is just over three miles long and two miles wide.
“Our projected grow in Russia is positive,” Andersson said. He hopes to see volumes of 3 million to 3.5 million vehicles by 2013. In 2009, Russia's sales dropped to 1.5 million from about 3 million in 2008 and 2.6 million in 2007.
But Andersson added that GAZ is cautious about predicting what its annualized volumes actually will be.