GENEVA — General Motors Corp. will be responsible for the day-to-day operations of its joint venture with OAO AvtoVAZ, says David J. Herman, vice president in charge of Russia and the Newly Independent States.

GM, Russia's largest automaker, OAO AvtoVAZ, and the European Bank for Reconstruction and Development (EBRD) are forming a JV to build the Lada Niva sport/utility vehicle (SUV) with a Chevrolet badge. GM and AvtoVAZ each will hold a 41.5% stake in the company, with the EBRD holding the final 17% (see WAI Update — Feb. '01, p.1).

In order to ensure GM quality, several key positions including the managing director, chief financial officer, head of sales and purchasing and other key positions, will be GM people when the JV starts production in 2002. “We will send between 10 and 15 management-level personnel there,” Herman says.

The small SUV, which will be a successor to the current Lada Niva, will use 100% local parts for the Russian version, including a 1.6L gas engine from AvtoVAZ.

Export versions, which begin in 2003, will use a powertrain from the Adam Opel AG/Fiat SpA engine joint venture. Western Europe is expected to receive 50% of the 75,000 units built annually.

The partners also are considering sending the vehicle to Asia and South America. Full capacity will be reached in 2004.

GM is contributing about US$100 million to the US$332 million venture. A new plant will be built on AvtoVAZ property in Togliatti for the project.