Thursday, December 28, 2006

GM boosts European Chevrolet production

Wednesday, November 29, 2006
GM boosts European Chevrolet production
Company wants to build on a 28% surge in sales outside the U.S. with a plant in Warsaw.
Chad Thomas / Bloomberg News

DETROIT -- General Motors Corp., the world's largest automaker, plans within two years to begin producing three Chevrolet models at a plant in Warsaw as the company seeks to boost European sales.

The Detroit automaker will hire UkrAvto, a Ukrainian company that owns the factory, to build the cars under license, Marc Kempe, a GM spokesman, said in a telephone interview Tuesday.

The plant will produce the Aveo sedan beginning next fall and two new hatchbacks in 2008. GM expects the factory to build 150,000 cars in the "mid-term," the company said in an e-mail.

Boosting sales outside North America is key to CEO Rick Wagoner's plan to overcome the 8.8 percent drop in U.S. purchases from 2000, when he became chief, to 2005. While GM was sliding in the United States, Wagoner engineered a 28 percent sales surge abroad.

Last year, for the first time, GM sold more cars and trucks outside the United States than inside it.

GM is introducing new versions of its European models, including the Opel Corsa small car, to counter falling sales and win back customers lost to competitors Volkswagen AG and PSA Peugeot Citroen.

GM also has used third-party contractors to build its cars at other European plants. A factory in Kaliningrad, Russia, is operated by the Russian company Avtotor, and produces the Hummer H3 and Chevrolet Aveo, Lacetti, Rezzo and Evanda models.

GM also broke ground on a plant near of St. Petersburg, Russia. Avtotor also builds cars for BMW AG and Kia Motors Corp.

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