Output at General Motors’ joint venture in Russia has halted since Monday, the world’s biggest carmaker by volume said on Friday amid media reports of a clash with its partner, AvtoVaz. “Production has stopped at GM AvtoVaz. Nothing has been built down there since Monday,” a GM Europe spokesman said.
Russian newspapers said AvtoVaz had stopped delivering parts to the venture’s plant in Tolyatti, but the GM spokesman declined to go into the reasons for the stoppage.
“We are doing everything to resume production as quickly as possible,” he said but added it was unclear when this might happen.
An AvtoVaz spokesman in Russia declined to comment and said the company would issue a statement no earlier than Monday after holding a board meeting.
AvtoVaz has taken a more assertive stance with GM since Russian state arms exporter Rosoboronexport installed new management at the automaker, which sold 720,000 cars last year.
AvtoVaz, which has long struggled to lift sales of its cheap, but clunky Lada models, announced this month it would build a new state-funded car plant and might close the joint venture with GM.
The strategy shift comes as Russia seeks to create an auto industry champion to meet the challenge of foreign rivals, whose sales of imported and locally assembled cars are booming.
The Vedomosti business daily, quoting a source close to AvtoVaz management, said AvtoVaz was losing money by supplying car kits to the venture at 15 percent below cost. That amounted to losing $20 million a year given annual output of 50,000 cars.
Russian media quoted car industry analysts as saying that Rosoboronexport was seeking to squeeze GM out of the venture and take control of the plant, which can make as many as 100,000 cars a year.
“AvtoVaz’s conflict with GM may end up in AvtoVaz buying out the Americans’ share,” Vedomosti quoted UFG analyst Yelena Sakhnova and Metropol’s Alexander Zhukov as saying.
The Tolyatti plant on the southern Volga near the border with Kazakhstan builds 50,000 Chevrolet Niva sport utility vehicles and Viva sedans a year.
GM has used the venture to fuel sales growth and win market share in Russia since 2002. It says Chevrolet is now the second-biggest foreign brand in Russia behind South Korea’s Hyundai Motor Co Ltd.
GM also imports Korean-made Chevrolets into Russia, but the joint venture plant still accounts for the bulk of GM models sold there, the spokesman said.
Sales in Russia of the Chevy Niva and Viva models fell by 14 percent last year to 46,000, industry figures show.
