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Auto Sales in Russia Suffer in April

Government offering incentives to entice buyers.

by on May.15, 2015

Sales have been slow at showrooms, like Moscow's Major mega-dealer, with little prospect for a quick turnaround.

On the heels of General Motors’ decision to pull up stakes in Russia, the country’s auto sales continued its dramatic descent in April dropping 41.5% despite the country subsidizing its auto loans.

According to the Association of European Businesses, the country sold 132,456 cars and commercial vehicles last month. The only upside for the country is that the top 10 sellers were all Russian carmakers.

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The result was a small improvement over the 42.5% loss in March. Year-to-date sales are 516,135 units: down 37.7%. (more…)

GM Slashing Presence in Russia

Opel to pull out, Chevy scaling way back in long-term shift.

by on Mar.18, 2015

Hello, we must be going. A GM Niva rolls down the Avtovaz assembly line. Plans for an updated car have been scrubbed.

General Motors plans to largely abandon the Russian market, a move that goes well beyond the short-term production cuts announced by key rivals like Ford Motor Co. in response to the economic crisis crippling the heart of the former Soviet Union.

GM’s German-based Opel brand will pull out of Russia entirely by the end of this year, while Chevrolet will scale back to focus on a handful of products such as the Corvette and Camaro. The maker will continue to market Cadillac products to Russia’s luxury buyers, but production will shift back to the U.S.

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“This change in our business model in Russia is part of our global strategy to ensure long-term sustainability in markets where we operate,” said GM President Dan Ammann. “This decision avoids significant investment into a market that has very challenging long-term prospects.”


Automakers Scramble As Russia’s Economy Melts down

GM, Audi, JLR temporarily abandon market, Nissan limits sales.

by on Dec.19, 2014

GM is one of several makers to cut off shipments to dealers like Moscow's Major, while others are sharply rising prices as the ruble collapses.

What seemed like a dream market just a few years ago has now turned into a nightmare, the Russian economic meltdown sending automakers from around the world into a scramble.

With economic sanctions already taking a serious toll, this past week’s collapse of the ruble has led General Motors, Audi and Jaguar Land Rover to temporarily halt sales in the heart of the former Soviet Union. Nissan, meanwhile, has decided to limit sales of some models and raise prices on others.

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“When the ruble sinks it’s a bloodbath for everybody,” said Carlos Ghosn, CEO of the Renault-Nissan Alliance., which is the biggest maker in Russia along with its local partner Avtovaz. “It’s red ink, people are losing money, all car manufacturers are losing money.”


Nissan Targets Sagging Russian Market with Datsun Brand

Russia expected to be the largest market in Europe.

by on Apr.07, 2014

The Datsun on-DO is the brand's first offering in Russia. It is a four-door, five-seat family sedan.

Despite a slowdown and sales, cuts in production and the political crisis in the Ukraine, global automakers are still moving ahead with plans to expand in Russia, which could become Europe’s largest single market before the end of the decade.

Russian sales dropped 5% last year and are expected to shrink further this year despite the pent up demand for new vehicles in European Russia. At the same, though, Nissan has moved forward with sales in Russia of its Datsun brand, which is aimed at the lower range of the market.

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Global automakers appear to be willing to look beyond Russia’s role in the messy political upheaval in the Ukraine as they continue to expand in Russia, which is expected to emerge as the largest automotive market in Europe well before the end of the decade. (more…)

GM Looks to Buoy Opel with Russian Expansion

Maker views country as next big market for new car buyers.

by on Oct.21, 2013

GM is positioning Opel to be its top brand in Russia. The spot is currently held by Chevrolet.

General Motors is shifting its strategy in one of the world’s top emerging markets, Russia, to create some new pace for its Opel, the cornerstone of its ailing European operations.

Russia is viewed by many automakers as key market in the future, including GM, Ford, Daimler and Volkswagen as well as Hyundai and Toyota. Additionally, Russia’s largest automaker, AutoVaz and its strategic partner, are also looking to expand. Bo Andersson, a former GM executive, was recently promoted to become AutoVaz’s first non-Russian chief executive.

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For the past decade, GM has made Russia, a target market for its aggressive global expansion of the Chevrolet brand. Chevrolet, according to GM, has now delivered 12 straight quarters of record growth as GM has pushed ahead with its plans for Chevrolet. (more…)

General Motors and Ford want American suppliers to follow them into Russia.

GM planning $1 billion investment in old Soviet heartland.

by on Jan.25, 2012

Cars move along Ford's assembly line in St. Petersburg.

General Motors is planning to invest more than $1 billion in Russia over the next five years, said James Bovenzi, managing director of GM Russia and CIS, and it expects production, including production by its joint venture partners, to double from 232,000 units in 2010 to more than 520,000 units in 2015.

But the maker doesn’t want to do it alone.  GM wants its traditional supply network to follow along.  And so do Ford, which sees significant growth potential of its own in Russia.

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“The reason we are there is we see opportunity,” Bovenzi said during a dinner meeting arranged by the U.S.-Russia Business Council to encourage American automotive suppliers to consider investments in Russia.

“There is a lot of pent-up demand in Russia” he noted. “The average vehicle is more than 10 years old.  The middle class is growing and nine of the 10 best-selling cars in Russia are foreign brands,” noted Bovenzi, adding GM’s Chevrolet brand was a top seller.


GM Fighting to Hold its Overseas Empire Intact

Decision on Opel bid delayed.

by on Jul.27, 2009

The sale of Opel has been delayed, but barring a turnaround in the U.S., GM may yet have to sell other parts of its global empire.

The sale of Opel has been delayed, but barring a turnaround in the U.S., GM may yet have to sell other parts of its global empire.

The new General Motors Corp. that has emerged from bankruptcy is fighting to keep its overseas empire intact.

Under pressure to sell off a controlling stake in its German-based Opel subsidiary, GM may yet have to auction off other key global ventures.

GM now doesn’t expect to make a final choice between two competing bids for Opel from Magna and the Belgian-based private-equity firm of RHJI until after the re-organized General Motors board of directors meets early next month. A third bid from Beijing Automotive Holding Inc. has been rejected, GM officials confirmed.

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The rejection of the Beijing Automotive bid prompted speculation that GM had turned the Chinese maker down because it didn’t want to contribute to the rise of a rival in the critical Asian automotive market. GM’s various China ventures have been very successful but the automaker’s Chinese partners, which own half the business have become increasingly assertive.