VIENNA – Gruppa GAZ, the Russian vehicle maker based in Nizhny Novgorod, signs a deal with General Motors Co. for the contract assembly of the next-generation Chevrolet Aveo, known as the Sonic in the U.S.

Production is scheduled to begin in mid-2012 at GAZ’s plant in Nizhny Novgorod. About 30,000 Aveo sedans and hatchbacks are expected to be built annually. The vehicles will be sold on the Russian market.

General Motors is focused on strengthening its market position in Russia,” Jim Bovenzi, president and managing director-GM Russia group and CIS, says in a prepared statement.

“By leveraging GAZ’s established resources, we will address the demand for affordable vehicles in the subcompact class while continuing the localization of our product lineup in Russia.”

Says Bo Andersson, president and CEO of GAZ Group and a former GM executive: “The cooperation with GM will strengthen quality and technology of every production capacity of GAZ. The decision taken enables GAZ to effectively use the investments in (its) passenger-car facility and to contribute the qualified workforce in the project with GM.”

GAZ plans to use the Nizhny Novgorod facility originally created for the Volga Siber, for contract assembly. Production of the Siber, the Russian version of the previous-generation Chrysler Sebring, started in mid-2008 and was phased out last fall. The Siber project turned into a disaster.

GM and GAZ, which is part of Oleg Deripaska's Basic Element group, have been in talks about car production for several years. In addition, GAZ still is negotiating with Volkswagen AG about contract assembly of up to 100,000 vehicles a year.

Andersson tells media the contract with GM does not exclude the possibility of working with other auto makers.

The GAZ plant will be the fourth site in Russia to assemble GM cars.

The current facilities include the OOO General Motors Avto plant in St. Petersburg, which assembles the Chevrolet Captiva cross/utility vehicle and Cruze small car, as well as the Opel Antara CUV and Astra car, from complete-knocked-down kits.

ZAO GM-AvtoVAZ, the joint venture with OAO AvtoVAZ and European Bank for Reconstruction and Development, produces the Chevrolet Niva CUV in Togliatti.

Kaliningrad-based ZAO Avtotor assembles Korean-sourced Chevrolet Lacetti cars from CKD kits, as well as other GM Daewoo Auto & Technology Co., Adam Opel AG and North American GM vehicles from semi-knocked-down kits.

Chevrolet sold 116,233 units in Russia last year, up 11.3% from 2009. The result places the brand at No.2 in sales of cars and light-utility vehicles. Opel was Russia’s No.15 best-selling brand, with 40,875 deliveries, up 19.2% from 2009.

In addition, the Daewoo brand, No.10 on the Russian market, sold 74,419 cars last year, up 44.7% compared with 2009. The Daewoo portfolio includes the Matiz and Nexia models, manufactured by General Motors Uzbekistan YoAJ, the Uzbek-plant owned 25% by GM.