Putin’s spokesman: GM to lose Russian market when it soars

MOSCOW, Mar 19 (PRIME) -- General Motors (GM), which plans to leave Russia, will lose the market by the time when it recovers, Dmitry Peskov, spokesman for President Vladimir Putin, told reporters Thursday.

“The company, unfortunately, is putting itself in a disadvantageous position for the period when the market swings to an active phase. The development always goes in waves, falling sales will be replaced by explosive growth…and then the company will be among the losers,” Peskov said, adding that when one company leaves, other firms take its place.

Industry and Trade Minister Denis Manturov said GM’s business strategy has failed, and the company is losing competition because its production localization is only 25%. The ministry will not take any steps against the company to punish it for the cancellation of the industry assembly agreement, he said.

He also said that no other company is planning to leave Russia’s car market, but “everything will depend on how the car market develops until the end of the year.”

On Wednesday, GM said it halts industrial assembly at its car plant in the city of St. Petersburg and will fully shut it down at the end of June, as well as suspend contract assembly of cars at a plant of Russian carmaker GAZ Group in Nizhny Novgorod in 2015. The company said that localization of its production is low and the market situation does not favor investment into its boosting.

A representative for GAZ Group said the company did not receive an official notification form GM on the issue and is continuing production of Chevrolet Aveo cars at the plant in Nizhny Novgorod.

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