VIENNA – Russia’s ZAO GM-says it will manufacture less than half the number of Chevrolet Viva cars initially expected this year due to sluggish demand for the new model.
Production of the Viva, based on the Opel Astra II, officially was launched at GM-in September 2004. Original plans for 2005 called for production of 7,500 units.
High price hampering Viva sales in Russia.
However, only 1,196 units were sold between January and July, and GM-AvtoVAZ Chairman Vladimir Kadannikov now says the production schedule is being cut to 3,000 Vivas for this year.
The problem appears to be the car’s high price.
"We asked a marketing company to conduct market research whether a car with that price tag would be popular,” Kadannikov says. “They said yes – and they made the mistake, not us."
According to Kadannikov, the joint venture, owned byCorp., OAO AvtoVAZ and the European Bank for Reconstruction and Development (EBRD), is considering whether to ask the Russian government to begin implementing a new law that reduces or eliminates tariffs on key car components. This would allow GM-AvtoVAZ to slash the production costs and price of the Viva.
The Chevrolet Niva SUV remains GM-AvtoVAZ’s main model.