GM to shut Russian plant as sales slide
By Gleb Stolyarov and Maria Kiselyova
MOSCOW (Reuters) - General Motors Co (GM.N: Quote) will shut its Russian factory and wind down its Opel brand in the country, taking a $600 million charge as it restructures its business to cope with a deepening downturn, the U.S. carmaker said on Wednesday.
After several years of growth in excess of 10 percent, car sales in Russia shrank in 2014 as the economy weakened because of Western sanctions over the Ukraine crisis and a slide in oil prices.
The rouble also tumbled last year, making consumers think twice about large purchases and manufacturers find ways to cut costs.
The U.S. carmaker said it would stop production at its St. Petersburg plant which makes the Chevrolet Cruze, Opel Astra and Chevrolet Trailblazer models by the middle of 2015. The closure of the plant will mean the loss of 1,000 jobs.
It will wind down the Opel brand by December and stop assembling mass-market Chevrolet cars at GAZ (GAZA.MM: Quote), a Russian vehicle factory, to concentrate on premium car sales.
"This decision avoids significant investment into a market that has very challenging long-term prospects," GM President Dan Ammann said in a statement.
Russia's Economy Ministry said late on Wednesday that no other foreign car company having an assembly line in Russia has said it would leave the market, RIA news agency reported.
"The Ministry of Economic Development of Russia cannot agree with the assessment of the market by one individual company," RIA cited the ministry's spokeswoman as saying. Continued...