General Motors stops production in Russia earlier image

General Motors, the largest carmaker in the United States on Wednesday said it will stop production at its St. Petersburg plant in Russia for a month during the summer, two weeks earlier than planned. GM blames a weak demand for new vehicles in the country.

“We are adjusting our plans according to market demand and taking into account the market’s recent correction,” said spokesman Sergey Lepnukhov.

New car sales in Russia fell 12 percent in May and year-to-date sales are down 4 percent compared to Jan-May period of 2012.
Many analysts have predicted that in the near future Russia could surpass Germany as Europe’s largest auto market, but considering this new trend, we don’t expect to happen this year. According to AEB, the Association of European Businesses in Russia, in 2013 Russians may buy 2.8 million vehicles – down from 2.935 million units in 2012.

“Unfortunately, the negative year-on-year trend in Russian car sales is continuing for the third month now, at an increasing pace,” said Joerg Schreiber, head of Mazda Motor Corp. (7261.TO) in Russia and chairman of the AEB’s automobile manufacturer’s committee.

Overall, year-to-data sales of GM vehicles in Russia were down 8 percent according to AEB.

Last year, GM closed its plant for two weeks.