Opel Group acts to counter downturn in Russian market
Berlin (AFP) - Opel Group, the European subsidiary of US auto giant General Motors, said on Tuesday it was reorganising its production in Russia amid falling sales as the economy battles the fallout from the Ukraine crisis.
Opel Group, which gathers GM's European activities, is taking immediate steps in Russia "to react to the difficult market environment", it said in a statement.
"In 2013, Russia was our third biggest market behind the United Kingdom and Germany and is currently facing serious turbulence," Opel Group chief Karl-Thomas Neumann said.
"While we believe in the long-term potential of Russia, there is significant immediate pressure on sales volumes and pricing while the ruble is deteriorating further.
"Since this is impacting our Opel Group business results and will continue to for the remainder of the year, we are taking measures now to limit our risk and stay on course," he said in the statement.
Production at Opel Group's St Petersburg plant, where both Opel and Chevrolet models are made, will be cut to a one-shift operation and a programme of voluntary redundancies will be offered, the group said.
An Opel spokesman told AFP that 500 employees out of the 1,600 people working in production at the site would be offered the voluntary redundancy option.
The company also said that Susanna Webber, previously managing director of purchasing and supply, would head up GM's Russia operations.
And the company plans to increase its use of local suppliers of components to avoid being hit by negative exchange rates from imports.
Opel Group said new vehicle registrations in Russia, where the ruble has slumped to record lows against the dollar amid EU and US sanctions over the Ukraine crisis, declined by 12.1 percent in the first eight months of 2014.
