GM Leaves Russia, Bought Out by AvtoVAZ
Russia’s largest automotive manufacturer, AvtoVAZ, announced Monday that it plans to buy General Motors out of its regional joint venture. The duo previously assembled Chevrolet-branded automobiles for the local market; however, GM lost interest after the market took a turn for the worse.
While sanctions from Western nations and falling oil prices upended Russia’s economy a few years ago, it was already headed for hard times. Wages have stagnated and average citizens no longer possess the same level of buying power they held a decade earlier. The Russian Economic Development Ministry predicts just a 1-2 percent growth rate up to 2030 and leadership doesn’t seem terribly interested in improving the situation for the citizenry, deciding instead to raise taxes on just about everything. GM was probably right to get out.
According to Reuters, AvtoVAZ signed an agreement to buy General Motors’ 50 percent stake in the venture, which saw the two companies build the Chevrolet Niva from a factory in Togliatti. While the Russian firm did not disclose financial details, the purchase effectively leaves GM with nothing to do and ends its assembly commitments in the region.
The Togliatti factory will continue rolling out models under the Chevrolet brand for “a certain period of time” before switching to Russia’s Lada brand, according to the agreement.
The facility has a capacity of roughly 100,000 cars a year but it’s unclear as to how much of that cap will be utilized. The Association of European Businesses reported on Thursday that Russia’s new vehicle sales are down 6.4 year-on-year for 2019. Lada has also been struggling. In November, the company announced the sharpest decline it has endured in three years.
[Image: Evannovostro/Shutterstock]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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No wipers, no mirrors, rear visibility that makes you wish for a camaro, and a windshield almost flat for huge heat gain in the summer and poor visibility. Also see youtube video on towing with a model_x . . . 1.5 hours of charging for every two hours of driving,
TTAC, thank you for not equating the sign to a 'small child', like some other media outlets did.