GM Investing $1 Billion in Russia

Will double production by 2015

GM plans to increase production in Russia from 232,000 units in 2010 to more than 520,000 in 2015, said Alan Draper, vice president in charge of purchasing at Ford of Europe. The company will invest $1 billion.

"The reason we are there is we see opportunity," James Bovenzi said on Jan. 12 on the sidelines of the Detroit auto show.

"There is a lot of pent-up demand in Russia... The average vehicle is more than 10 years old," he said.

"The middle class is growing and nine of the 10 best-selling cars in Russia are foreign brands," he said, adding that GM's Chevrolet was a top-seller.

"Russia will (soon) be one of the most important markets in the world," Draper said. He added that plants established there by respected parts suppliers could improve quality and let international firms meet local content requirements.

A business group meanwhile announced that sales of cars in Russia rose by 39% in 2011 year-on-year to over 2.65 million vehicles as the market bounced back from the last economic crisis.

The Association of European Businesses (AEB) -- whose auto committee groups 43 Russian and European brands -- predicted that growth would continue in 2012 with sales of cars in Russia reaching 2.8 million units.

That would bring Russia back to the record sales high of 2.9 million units recorded in 2008 just before the global economic crisis caused a 49% reduction in sales the following year.

Copyright Agence France-Presse, 2011

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