GM Announces New Plans for Russia
In Soviet Russia, business model changes you.
(Apologies. I know that joke has been done a million times, but I just can’t help myself.)
General Motors announced today that it intends to change its business model in Russia by focusing primarily on the Cadillac brand and Chevrolet vehicles including the Corvette, Camaro, and Tahoe. More specifically, GM says that the Chevrolet brand will reduce its presence considerably, and the Opel brand will disappear from the market entirely by the end of 2015.
“This change in our business model in Russia is part of our global strategy to ensure long-term sustainability in markets where we operate,” said GM President Dan Ammann. “This decision avoids significant investment into a market that has very challenging long-term prospects.”
It was also announced that production at the GM Auto plant in St. Petersburg will come to a stop by mid-2015, and that Chevrolet production will be discontinued this year.
“We had to take decisive action in Russia to protect our business. We confirm our outlook to return the European business to profitability in 2016 and stick to our long-term goals as defined in our DRIVE!2022 strategy,” said Opel Group CEO Karl-Thomas Neumann.
GM plans to raise its market share in Europe to 8% by 2022.
The changes announced today should serve to earn GM net special charges up to $600 million, including around $200 million in non-cash expenses.