MOSCOW -- Russia's biggest automaker, AvtoVAZ, is buying out General Motors from their joint venture producing vehicles in Russia under the Chevrolet brand, effectively ending GM's presence in car assembling in the country.
On Monday, AvtoVAZ signed an agreement to buy GM's 50 percent stake in the venture, which builds the Chevrolet Niva in a factory in Togliatti, a city on the Volga river.
AvtoVAZ did not disclose financial details of the deal which would end GM's presence in the car assembling business in Russia.
According to the agreement, the factory will continue to produce and sell cars under the Chevrolet brand for "a certain period of time" before switching to Russia's Lada brand.
Built in 2001, the GM-AvtoVAZ venture has the capacity to produce up to 100,000 Chevrolet Niva units a year. Sales of the Niva were 1,950 in November, down from 2,365 in the same month of 2018, according to data from the AEB industry association.
The Chevrolet Niva's design was based on the Soviet-era Niva by AvtoVAZ engineers and developed further with GM's input.
Russia's car market was among Europe's top performers before the imposition of western sanctions in 2014 which, coupled with falling oil prices, sharply weakened the ruble, increased the cost of buying a car and curbed Russians' ability to buy new vehicles.
As a result, foreign automakers started to rethink their strategies of doing business in Russia
Russia's automobile market has struggled in 2019, with sales of new cars in November falling by 6.4 percent year-on-year, the Association of European Businesses said last Thursday.