General Motors Co (GM.N) said on Friday it will add 1,500 workers at its St. Petersburg, Russia, assembly plant as part of a previously announced plan to boost production there.
GM broke ground on Friday on its expansion of GM Auto, its plant in St. Petersburg, that will result in annual production capacity more than doubling to 230,000 vehicles from 98,000 now. On completion, expected by 2015, employment there would increase to 4,000 people from 2,500 now.
The St. Petersburg plant builds the Chevrolet Cruze sedan and hatchback and the Opel Astra hatchback, and will add production of the Astra sedan under the expansion.
The expansion of GM Auto, which opened in 2008, is part of a plan announced last year by several automakers with the Russian government to lift capacity. GM said at the time it would spend $1 billion (640.90 million pounds) in Russia over five years, including investing to boost production at the GM-Avtovaz joint venture in Togliatti, Russia. All told, GM said the moves would boost its combined annual production capacity in the country to 350,000 vehicles.
In addition to GM, whose Chevy brand was the biggest foreign seller in Russia last year, Renault SA (RENA.PA) and Ford Motor Co (FN) are among the automakers in early stages of expanding plants or moving into those sites owned by Russian partners.
The increase in Russian manufacturing capacity largely results from the government's Decree 166, which offers foreign players an exemption on customs duty for parts when they agree to ramp up local production to 350,000 vehicles a year.
The government launched the incentives in late 2010, complicating talks on joining the World Trade Organization that were finally wrapped up in December of last year.
News source: Thomson Reuters
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