GM pulls out of Russian car assembly business with AvtoVAZ deal
GLEB STOLYAROV and ALEXANDER MARROW
December 09, 2019
Reuters via autonews.com
MOSCOW -- Russia's biggest automaker AvtoVAZ said on Monday it would buy 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.
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.
On Monday, AvtoVAZ signed an agreement to buy GM's 50 percent stake in the venture, which sees the two companies produce the Chevrolet Niva from a factory in Togliatti, a city on the Volga river.CONTINUE AT THE LINK ABOVEAccording to the agreement, the factory will continue producing and selling cars under the Chevrolet brand for "a certain period of time" before switching to Russia's Lada brand.
Built in 2001, the Togliatti factory has the capacity to make up to 100,000 cars a year and produces the Chevrolet Niva, whose design was based on the Soviet-era Niva by AvtoVAZ engineers and developed further with GM's input.