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Business news, 27.07.2007 19:09

Carmakers Get Down to Business

GM Foreign carmakers and components producers unveiled their investment plans for St. Petersburg at the AutoRussia 2007 conference that opened in june at Grand Hotel Europe.

American carmaker General Motors will open its plant by November 2008. The plant is being constructed in the Shushary district on the outskirts of St. Petersburg. Its production capacity is projected at 70,000 cars a year. Investment into the project should total $300 million.

Richard Swando, managing director of General Motors in the CIS, said that the Chevrolet Captive will be the main model produced at the plant, Interfax reported Tuesday.

“Chevrolet Captive will be launched in November 2008, while the C-class sedan could be launched in April 2010,” Interfax cited Swando as saying.

GM has two production sites in Russia.

Speaking at the conference, Henrik Nenzen, president of Ford Russia, promised to increase Ford’s turnover in Russia by 50 percent this year up to $3 billion. Last year Ford Russia reported turnover of $2 billion.

High transport costs are forcing foreign carmakers to set up local production sites for the manufacture of components. “We are interested in localizing the production of all components,” Nenzen said. However he did not announce any related plans.

On the other hand, the “Russian Detroit” is attracting component producers. Canadian company Magna already owns a number of assembly plants in Russia and will start construction of a plant in Shushary in January 2008.

According to Interfax, Maxim Sokolov, Chairman of the Committee for Investment and Strategic Projects, said that the plant could be completed in a one and a half to two year period.

At the moment Magna is undertaking exploration works on a land plot. The decree on projection and construction will be issued by the St. Petersburg government before the end of 2007, Sokolov said.

Fujio Hosaka, managing director of Nissan Manufacturing Rus, announced that their new plant in Kamenka, that is to start operating in January 2009, will initially produce one model and later could expand its assortment to three or four models.

Initial production capacity will be 50,000 units a year, which could be expanded to 500,000 units. Although at this stage all components will be imported, Nissan will consider localizing their production in the future, Hosaka said. Investment into the plant will total about 5.5 billion rubles, according to Maxim Sokolov.

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