General Motors To Exit Russian Market

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.

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ctsang - 12/10/2019 12:24:26 PM

+3 Boost

even communists don't want GM vechicles

Vette71 - 12/10/2019 12:54:20 PM

+2 Boost

While this move makes sense, there is a danger that GM is trying to shrink its way to higher profits. Sooner or later GM has to put a stake in the ground and decide where it is going to grow by offering better products than its competitors. Growth and profits matter. Profits without growth are a slow death.

mre30 - 12/10/2019 2:07:03 PM

+2 Boost

Perhaps its because of the legal structure in Russia....did you read this BMW Story?

https://carbuzz.com/news/theres-a-russian-bmw-scam-no-one-is-talking-about
BMWs built in Russia? What could go wrong?

Russia has its own way of doing things. It always has. Despite growing globalization, Russia remains, well, Russia. Rejecting outside influences, turning the media into the enemy of the people, and an authoritarian leadership trying to pass itself off as a democracy are the norm. Needless to say, basic consumer protection and transparency laws are deliberately vague if they exist at all. And that includes those that apply to new vehicles, such as BMWs.

Although BMW Russia is the officially licensed importer for the German automaker, not all Russian-market BMWs are built in Germany. An unknown number are manufactured at Russia's own Avtotor plant in the province of Kaliningrad, where not a single German employee or BMW representative is on location to monitor build quality standards.

While BMW Russia is purchasing German-built vehicles with two-year warranties, it's also buying BMWs from the Russian factory. While these Russian-built BMWs are supposedly identical to their German-built counterparts they are sold without factory and manufacturer warranties. Both the German and Russian-built BMWs are distributed to Russian BMW dealerships as if they're the same when in fact they're not.

MDarringer - 12/10/2019 8:14:09 PM

+1 Boost

More gender-token leadership. How much longer until Barra runs GM out of business?