GM Russia Plant in Third Unscheduled Shutdown of Year

MOSCOW – General Motors suspends operations at its St. Petersburg, Russia, plant for the third time this year and plans a fourth shutdown as the country’s auto-sales slump continues.

Production was halted Monday, Sept. 29 and is to resume Friday, Oct. 3, followed by another closing Oct. 10-27. Assemblies of Opel Astra and Chevrolet Cruze models also were interrupted from Feb. 24-March 28 and from June 9-20. Additionally, operations were suspended during the scheduled summer shutdown July 16-Aug. 15.

GM Russia ‟had foreseen the current situation” and planned the latest shutdowns to ‟prevent overstocking” amid falling sales, Sergei Lepnuhov, director-corporate affairs, says.

While all global automakers are seeing the market contract, GM Russia deliveries are falling at a faster rate.

Sales of GM Russia brands, including Cadillac as well as Chevrolet and Opel, dropped 48% in August compared with year-ago and were off 23.6% through the year’s first eight months, according to WardsAuto data.  Russian sales by all automakers fell 25.8% in August and 12.1% year-to-date.

Deliveries of the St. Petersburg-built Opel Astra plunged 66.6% from January through July to about 15,000 units, according to the  Association of European Businesses Automobile Manufacturers Committee. Cruze sales plummeted 59.9%, to about 18,700 units.

Although Russian auto sales have been falling across the board since about March 2013, Maxim Meyksin, head of the St. Petersburg Committee for Industrial Policy and Innovation, says GM’s product range has become outdated.

Some analysts from the Russian Ministry of Industry and Trade suggest the GM’s decline may be the result of increased production of SUVs and B-segment cars.

Vladimir Popov, president of Favorite Motors, the official distributor of Chevrolet, Volvo, Kia and Ford models in Russia, disagrees, saying GM’s sales decline ‟corresponds to the current state of the market.”

Popov believes GM Russia sales may recover later this year, when the automaker accelerates its marketing and advertising activity.

GM launched its plant in St. Petersburg in 2008. Current production capacity is estimated at 98,000 units a year. An agreement with the government calls on increasing capacity to 230,000 units by 2015, while localization of parts is expected to reach 60% by 2018.