Kommersant – St. Petersburg GM factory has decided to suspend production for two months, due to stagnant demand. According to the dealers and experts, however, GM suffers from a relatively low localisation rate and an obsolescent model range.
As announced by the GM press office, the factory will not be operating between 23 March – 15 May. The factory had operated for four days in August and September 2014 each and for eight days in October.
According to AEB data, GM has sold 189,500 automobiles in Russia in 2014 (-26.4%). The overall shrinkage rate in the market was 10.3%. The market share of the company has remained at 7.6%, declining by 1.7 points. The sales figures according to the brands are as follows; Chevrolet – 174,600 (-29.5%), Opel – 81,400 (-20.2%) and Cadillac – 1513 (-12.5%).
GM has increased prices sharply, due to the depreciation of the rouble. The dealers, who spoke to Kommersant, are of the opinion that GM’s low localisation rate is the reason behind the price increase. The renewal need of the Chevrolet model range is another factor.
The company had previously announced that the production of Cadillac Escalade and Chevrolet Tahoe models would start in 2015. The production of Opel Mokka was being planned to start in May 2016. Kommersant has received information that these plans are currently being reviewed by the factory management.
Auto-Dealer-SPb general director Mihail Chapligin has stated that it’s hard to understand the strategy of GM:
“They had to react much sooner, considering the fact that the demand for popular models started to fall a year ago. They, on the other hand, decided to manufacture the models, which would reach maximum annual sales figures of 5000-7000 vehicles. They had to opt for models, which would sell 50,000.”
According to Chapligin, GM factory has used only a third of its actual capacity in 2014.
