Carscoops- GM is putting the brakes on its Russian operations, as the carmaker decided to wind down its Opel brand and sales of all mainstream Chevy cars, while also idling its manufacturing facility in St. Petersburg.
"The Chevrolet brand will minimize its presence in Russia and the Opel brand will leave the market by December 2015," said GM in a statement. "The GM Auto plant in St. Petersburg will halt production by the middle of 2015. GM is planning to idle the plant. Furthermore, the contract assembly of Chevrolet vehicles at GAZ will be discontinued in 2015," the company added.
GM said that it will continue to provide warranty, parts and services for their Chevrolet and Opel vehicles.
Once a promising market, Russia is now feeling the effects of a prolonged economic slump with overall car sales that were already down 10 percent in 2014, now forecast to drop another 35 percent this year, according to Reuters. GM had temporarily halted sales in Russia this past December.
“We had to take decisive action in Russia to protect our business. We confirm our outlook to return the European business to profitability in 2016 and stick to our long-term goals as defined in our DRIVE!2022 strategy,” Opel boss Karl-Thomas Neumann.
One the other hand, luxury car deliveries have managed to stay afloat during the crisis, which is why GM has opted to keep selling Cadillacs as well as certain higher-end Chevrolets, including the Corvette, Camaro and Tahoe, in Russia. Cadillac in particular, is doing exceptionally well, with Russia being its fourth largest market in the world.