Russia: Kremlin warns GM the one to lose by retracting from market image

The country’s government said it was regretting the US automaker’s decision to shut down its factory in Russia and scale down the Opel brand in a strategy designed to reduce the company’s local presence and alleviate losses.

According to Kremlin the actual losing side would be General Motors, the biggest US carmaker and the third largest in the world, with the Russian market expected to return to growth as soon as next year. “We can express regret but on the other hand there never is a vacuum on the market, if one company leaves, other companies fill this gap and … the company unfortunately has put itself at a disadvantage for when the market picks up,” commented Dmitry Peskov, the Kremlin spokesperson. Earlier this week General Motors announced it would shut down its assembly facility in Sankt Petersburg, loosing around 1,000 employees in the process. The company added it would scale down the presence of the Opel brand and also cease manufacturing of certain models produced at factories belonging to the GAZ group, save for the best-selling Chevrolet Niva sport utility vehicle.

The US automaker also added the company would refocus its restructured business towards the sales of Cadillac models and also certain Chevrolet cars produced in the United States, as a measure to cope with the prolonged economic downturn – since sales of luxury cars slumped less than their mass-market counterparts. Russia has seen numerous automakers reshuffling their local units, ceasing production, lifting prices and ending imports of certain models as the car market collapsed because of a massive economic downturn.

Via Reuters