GM-AvtoVAZ Confirms Expansion Plans

VIENNA – The GM-AvtoVAZ board of directors approves funding to extend plant capacity to 120,000 vehicles annually by 2015 and to develop the next-generation Chevrolet Niva SUV.

The joint venture “will fund the two projects with its own resources,” GM-AvtoVAZ says in a prepared statement following the board’s recent meeting in Togliatti, Russia.

A new stamping plant, body shop and engineering-support facilities will be established on a 49-acre (20-ha) site in the special economic zone of Togliatti, as part of the project.

Currently, GM-AvtoVAZ sources welded bodies from stakeholder AvtoVAZ.

Up to 1,500 new jobs will be created as a result of the expansion.

“Board members were informed about the completion of exterior and interior design work for the next generation Niva model,” GM-AvtoVAZ says. The launch of the next-generation Chevrolet Niva is slated for 2015.

According to earlier plans, GM-AvtoVAZ was expected to produce a successor to AvtoVAZ’s Lada 4x4 small SUV as well. However, sources say that program appears to have been canceled.

In related news, the European Bank of Reconstruction and Development pulled out as shareholder in the JV at the end of September.

Prior to the move, the EBRD held 16.78% of the shares in GM-AvtoVAZ, with General Motors (via its subsidiary GM Auslandsprojekte) and AvtoVAZ each controlling 41.61%.

GM-AvtoVAZ purchased, then canceled, EBRD’s shares, leaving GM and AvtoVAZ each controlling 50% of the JV. The EBRD’s exit does not exclude possible involvement in future GM-AvtoVAZ projects.

GM-AvtoVAZ celebrated its 10th anniversary of the start of production last month. Since launch, the JV has manufactured more than 450,000 vehicles. The Chevrolet Niva accounts for the lion's share of the production. Between 2004 in 2008, the company also built the Chevrolet Viva, a sedan based on the Opel Astra, in relatively small volumes.

Some 7.4 % of GM-AvtoVAZ’s output to date was exported to other Commonwealth of Independent States countries.

The JV’s best year was 2011, when it built 57,765 units. The auto maker produced 46,076 vehicles this year through September, up 16.6 % from like-2011. It plans to make some 63,000 units in 2012.