28.10.2003
GM-AVTOVAZ to build second model in Togliatti

Local version of current-generation Astra to be built beginning in 2005. Planned annual capacity of up to 17.000 units.

GM-AVTOVAZ, the joint-venture between General Motors and AVTOVAZ, will build a local sedan version of the second-generation Astra compact car at its plant in Togliatti, Russia, the company announced on October 28.

Beginning in 2005, GM-AVTOVAZ will start with the assembly of the new vehicle. Up to 17,000 vehicles per year are planned, for sale on the Russian market only. This locally built model will be sold under the Chevrolet brand name.

The announcement of the addition of a new model at the GM-AVTOVAZ JV plant comes a little over one year after the joint venture's first model, the Chevrolet Niva, rolled off assembly lines. Since start of production on September 23, 2002, over 17,000 Chevrolet Nivas have been produced. As of 2004, the Niva will be exported to Europe, Asia, the Middle East and Latin America.

"We can look back at a very successful first year of our joint venture with AVTOVAZ," said Michael J. Burns, President of GM Europe. "The team at the plant has worked hard at making the joint venture a success, and the result is evident. GM-AVTOVAZ JV fully embraces GM's quality process, and sales of the Chevrolet Niva have been very strong. We see a lot of market potential for a locally built compact car in Russia, but this new project also reconfirms our confidence in the joint venture and the business relationship with AVTOVAZ."

Vladimir Kadannikov, Chairman for AVTOVAZ, added: "The GM-AVTOVAZ JV is a very important partnership for us. The JV has clearly stimulated growth in the region of Samara by creating over 2,500 new jobs in the region, working both directly or indirectly for the plant. With the addition of the new model, GM-AVTOVAZ will become an even more important player in the Russian automotive sector."

The GM-AVTOVAZ plant in Togliatti, Russia, is a joint venture between GM, AVTOVAZ and the European Bank of Reconstruction and Development (EBRD). Under the terms of the agreement, GM and AVTOVAZ each hold a 41.6 percent stake in the joint venture and EBRD holds the remaining 16.8 percent share. With a total investment of $338 million, the Joint Venture represents one of the largest foreign investments in the automotive industry in Russia.