GM Stops Selling Cars to Russia, Shutters St. Petersburg Plant
General Motors has decided that the company will stop selling to the Russian mass market, resulting in shutting down a USD$300 million plant in St. Petersburg. With less than eight years in production, the plant’s collapse will also result in lowering production of their German-based brand Opel, along with the complete halt of selling cars in Russia by the end of 2015.
The closure of the plant signals the loss of approximately 1,000 jobs along with cessation of Russian production of the Chevrolet Cruze, Opel Astra, and Chevrolet Trailblazer. As General Motor’s presence in Russia will be significantly reduced, there will be a $600 million in special charges against the company’s first quarter earnings. Although the loss is significant, GM President Dan Ammann stated, “This change in our business model in Russia is part of our global strategy to ensure long-term sustainability in markets where we operate." Russia was expected to be one of the world’s fastest growing car markets. In 2012, GM expected Russia to run along the same lines as China in terms of growth. Several years passed with over 10 percent growth. However, 2014 showed a decline in Russia’s economy. This has since grown in greater severity due to the Russian occupation of Crimea along with the continuous Ukraine conflict. The Russian car market is predicted to shrink by up to 35 percent as approximately 70 percent of cars sold in Russia are sold at a loss. General Motors is an American multinational corporation that designs, manufactures, markets, and distributes vehicles and vehicle parts, and sells financial services. With a yearly production output of over 9 million vehicles, General Motors stands as one of the world’s largest automotive companies. The company employs over 216,000 people and has met over $155 billion in yearly revenue. Divisions include Buick, Chevrolet, Cadillac, and GMC. ASAP Semiconductor is a leading supplier of GM products. Prospective customers can browse our inclusive inventory of hard-to-find obsolete and current GM parts at www.asapsemi.com. If you are interested in a part, please feel free to contact our knowledgeable sales staff at sales@asapsemi.com or 1-714-705-4780 for a quote.
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