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General Motors To Reportedly Expand Lineup In Russia

General Motors plans to expand its lineup in Russia as the country’s economy continues to recover. That much is according to a recent WardsAuto report.

GM all but pulled out of the Russian market in 2015, as the nation’s economy was hit by a fiscal crisis caused by Western economic sanctions and the falling value of the ruble. The automaker pulled its Chevrolet brand out of the country’s mainstream vehicle segments and notwithstanding the GM-AvtoVAZ joint venture that produces the Chevrolet-branded Niva SUV, also halted manufacturing operations and completely discontinued the Opel brand, which it recently sold to French automaker PSA Groupe. The developments left GM selling only the Chevrolet Corvette, Camaro, and Tahoe as well as the majority of Cadillac models in the country, enabling the likes of Kia and Hyundai to significantly grow sales and market share.

GM recently took its first step to expanding its lineup of Chevrolets by announcing that it will sell the all-new 2018 Chevrolet Traverse in Russia. The move is a first for GM and for Chevrolet, as the nameplate has never been sold in Russia — a market that has been as hungry for crossovers and SUVs over the past decade as the United States has become over the last year.

As to what the reported expansion of the Chevrolet brand in Russia could entail beyond the Traverse is currently unclear, though it would make sense to fight Kia and Hyundai with the complete Chevy portfolio, including the Spark, Sonic, Cruze, Malibu and Impala. Even more importantly is the fact that the market is ripe for such vehicles as the Trax/Tracker B-segment and Equinox C-segment crossovers, along with what has been reported as an upcoming all-new Chevy Blazer midsize crossover. Fortunately, Chevrolet is held in high regard in the country, especially when it comes to crossovers and SUVs.

Beyond Chevrolet, some logical thinking would peg The General in offering the full suite of future Cadillac sedans and crossovers, of which there will be at least three of each. Doing so would be substantially lucrative for the luxury brand along with its parent firm, while building the image of the Cadillac brand in a land that has become overwhelmingly dominated by Korean imports at GM’s expense.

GM Authority Executive Editor with a passion for business strategy and fast cars.

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Comments

  1. In, out & in again. All the indecisive stuff don’t breed confidence for GM, the article already says they’ve lost sales to Hyundai now they find themselves playing catch up in a country they was once established.

    Reply
    1. Yup. A whole bunch of inconsistencies, which really defines GM as an organization and ultimately hurts them in the long run.

      There are examples all over the place, with every single brand/division GM has had. They should follow Apple’s example — stable and solid.

      Reply
  2. In Russia there is a lot of closed door negociations, Buisness is not done there like here and often to get what you want you need to walk away.

    The Russian economy needs western help and walking away hurts them more it hurts us.

    Reply
    1. Scott – do you have first hand experience in doing business in Russia? Have you ever visited?

      It doesn’t seem so as you’re living in the 90s with your comment regarding “closed door negotiations”. A lot has changed in the last 30 years. Time to get with it.

      As for the Russian economy “needing Western help”, you’re once again mislead. Have a look at economic indicators. Even with sanctions in place, the economy is recovering extremely well to the point of being healthy. The us vs. them mentality won’t go very far… not sure why you feel that it is the right approach. To refocus on the topic at hand regarding who needs who – GM needs Russia. Huge market potential where GM has nearly zero presence today due to poor decision making and flip flopping.

      Chevy has a decent reputation, while Cadillac is a non starter; people would rather pay more for a used BMW imported from Germany than pay less for a brand new Cadillaac. If Caddy can turn things around in Russia, it can di well in any market.

      Reply
      1. Alex I export auto parts to Russia.

        While I agree it is better than it used to be it is still not like dealing with Canada.

        The truth is the Russians are reliant on western companies and the sale of oil to Europe. Cut off the sale of oil and Putin gets pissed.

        We still get issues with shipping. Stolen shipments and tons of fraud. We have instituted safe guards to prevent issues but they still happen much more than most other areas out side indonisia.

        Then companies investing in country are even more at risk to the government than in ‘China. They will be fully vested and risk getting booted out at the drop of a hat or cut off at anytime.

        The rewards are great but so are the risk.

        Reply
        1. Scott,

          It seems that the issues you’re referring to are really out of date.

          You have issues with shipping? I can tell you several stories of shipments getting stolen in the U.S. Besides, international shippers like FedEX or DHL should be able to safeguard these for you… or provide insurance.

          Outside of customs and inspections, shipping to Canada is almost the same as shipping within the U.S. thanks to progress made via NAFTA. In shipping to Russia, you’re shipping across an ocean.

          Regardless, I don’t think that your experience in shipping things to Russia should be any indicator of how a multi-national firm like GM operates in the country.

          As per my comment below: what risk are you referring to? If you want a true example of “great risk”, then have a look at Venezuela. Russia is almost a polar opposite from that: the government is motivated, the people are looking for growth, opportunities, challenges, and are highly entrepreneurial. I see this first hand year in and year out.

          Reply
      2. The US economy needs Russian help. Before the sanctions The Russian national debt was $200 billion. Now it’s $158 billion. The Russians are paying down their dept. US government debt is out of control. We never get anything paid down. Like getting New credit cards and transferring the debt.

        Reply
  3. I have an idea, bring back Hummer it sold well in Russia!

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  4. Thank you GM Authority for showing us the map with an arrow pointing to Russia. I wouldn’t have been able to find it without it…

    Reply
    1. It’s a big place… yet some people miss it still.

      Reply
    2. The arrow marks a direction. The direction what is export for one and import for the other.

      Reply
  5. If one is accustomed to Lada automobiles, even a Chevy is a monumental step up. Meanwhile GM Europe is in death throes; nobody is accustomed to Ladas there.

    Reply
  6. Sort of reminds me of Fiat in America. They played the in and out game too and the American consumer is still cool about Fiats. Hopefully Chevy should shine as a better product.

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  7. Alex I hope you were being facetious thinking your readers on this forum would not be able to pinpoint Russia on a map .
    I wonder about the timing of GM to jump back into Russia right after Congress and the President signed a bill (reluctantly) imposing sanctions on Russia that are the worst since the Cold War for their meddling in our 2016 elections . They won’t hurt the billionaires in the Putin government but will hurt the population .
    I think Scott was spot on ; as long as Putin holds on to his Presidency ( and he is up for re-election next year ) the people are the ones that can hardly afford a substantial purchase like a new car .
    And no I haven’t visited Russia but rely on the news ( and not internet news ). 🙂

    Reply
    1. I think Arrow was a good idea. There are a lot of Americans that cannot find the USA on the world map. There are some Americans don’t know that New Mexico is part of the US. There are even some Americans they cannot name three countries we share a border with.

      Reply
      1. Three? I can also name only TWO countries the USA has a border with: Canada and Mexico.

        Reply
        1. Zach — I was being facetious, yes.

          You should, however, check out the original image at the link below… it should give you an idea of what the arrow was doing there in the first place:

          http://gmauthority.com/blog/wp-content/uploads/2012/07/Russian-Commonwealth.jpeg

          About the rest of your comment: “the people” in Russia can afford and continue to afford all kinds of vehicles. This is no longer a third world country. The German luxury marques were and continue to be highly popular, so the economy is not in shambles as some would have you think. The most popular practice is and has been to import barely-used Germans cars from the EU. There is an entire industry around this. And they would much rather buy a brand new car than a used one.

          So, what’s taking place now is that Russians are buying brand new Kias and Hyundais. They offer a very strong lineup of cars and crossovers… and have been extremely successful in Russia by not wavering on their commitment to the market. It has paid off handsomely. There are now even owner/fan clubs for both brands in various cities.

          The sanctions, whether past or recent, don’t impact GM.

          I will not comment on the “merits” (or lack thereof) in which they were passed, as this is well beyond the scope of this discussion.

          Reply
        2. Not all borders are on land, some are maritime borders. Like USA and Russia.

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          1. Reply
    2. I am friends with many recent Russian immigrants . The western news outlets do not report what is actually happening in Russian . Never did . They tell things through a narrative . Even in USA , Russian like German cars and not so much Caddy . They like style .

      Reply
  8. This sort of runs counter to the current climate of sanctioning Russia and the growing tensions between the US and that country. Also for a company that has repeatedly espoused corporate ethics in the wake of the ignition switch debacle it seems pretty unlikely GM can wade into the swamp of Russian business without making some serious ethical compromises.

    Reply
    1. With Russia there is great potential for gain but it comes at great risk.

      GM can not invest more than they can afford to lose.

      At least in China needs us more than the Russians do.

      Reply
      1. Edward, two questions:

        1. What “ethical compromises” would GM be making in entering Russia?
        2. In what way is Russian business a “swamp”?

        Scott:

        What “great risk”? What does GM “stand to lose”?

        It seems that the practices you’re referring to (without really doing so) took place in the 90s after the fall of the USSR, before there were any standards, cultural changes, etc. Suffice to say these shady practices no longer exist.

        For instance, are you saying someone will cease a (GM) factory? No one will do so, especially given that most international factories nowadays are joint ventures between a foreign and a local firm (like in China, but with much more favorable terms). So again, what “great risk”? The dealers who were all part of GM in Russia pre-2015 are all individual business owners who want to make money… sell cars… service cars… sells parts. They are all “bought in”, so to speak… and want to sell more cars.

        Russia’s current government has been and continues to be friendly to businesses, local and international alike. The current poltical-economic environment in the country is a very pro-business and pro-growth.

        Describing today’s Russian market as one of “Great Risk” is like calling California the Wild West. It would have been accurate years ago… but no longer applies today.

        If you want a true example of “great risk”, then look no further than Venezuela. Russia is almost a polar opposite from that: the government is motivated, the people are looking for growth, opportunities, challenges, and are highly entrepreneurial.

        The bottom line here is this: if you truly really believe there is “great risk” with GM’s presence in Russia, then GM should have pulled out of every South American market yesterday… there is significantly more risk and corruption there, with significantly less opportunity than in Russia.

        Reply
  9. Alex I am shocked of all people you try to make it sound as if we were dealing with Brittian.

    Russia is an odd mix of some capitalizam with a large dose of dictator controls communism. With a factor of third world to it.

    You have the risk that Putain can take what ever he wants at any time. Or the US government can embargo Russia at any time for deals with Syria, Iran, or N Korea.

    To deal with Russia is to to deal with a very volatile economic political situation.

    The taking of the plant in Venezuela was just a small peak at what could be lost.

    China may not like us but they would collapse with out us. Putain on the other has little need for us. He is bent to dominate us any way he can.

    GM can put billions into Russia and the could take it all at any moment.

    Putain is evil but needs to be respected.

    The moral here is if someone wants to borrow from you do not loan more than you can afford to lose.

    Then there is the criminal side that make the old NYC Mob look like Boy Scouts.

    I sat and listen to a man last year in a legal fund transfer lose nearly a million dollars to the Russian Mob. He took many safe guards but was still hacked by some very sofistcated means that may also have had ties to owned political people.

    While we have issues here things are still much different there and much more unstable.

    It may not be the Stalin era but it is the Putain era. Don’t be fooled by our shirtless comrade.

    Reply
    1. Scott — if you are “shocked” that I, of all people, would take a logical stance on this, then it should come as no surprise to you that I have a significant amount of experience with the country — and therefore take a very level-headed approach as it relates to matters with the country, an approach that one simply can not have due to the mass amounts of misinformation and straight-up propaganda that is fed by the mainstream news outlets as it relates to the country.

      Allow me to elucidate you on each one of the delusions or misconceptions seen in your comment.

      1. You write:

      “Russia is an odd mix of some capitalizam with a large dose of dictator controls communism. With a factor of third world to it.”

      Really? What dictator control is there in Russia? How and when have we seen such things in the last say, ten to twenty years? I can not think of one example. I’m sure you can’t either.

      2. “To deal with Russia is to to deal with a very volatile economic political situation.”

      That depends on how what you consider “a volatile economic political situation”. Economically speaking, the sanctions imposed on the country in 2015 did create economic instability, one from which the country has already recovered — more or less. Political instability, though? I have not seen a business be impacted directly by any kind of political circumstance in the last decade. Again, the business environment is very friendly and welcoming, no one is going to steal your goat or re-appropriate it. No one has done so in decades.

      3. The “taking of the Venezuela plant” is exactly what will not and can not happen in Russia. If you have the slightest idea of the culture, the people and the business environment, you will see that what took place in Venezuela is far from what can even remotely or potentially happen in Russia. In fact, what is taking place in Venezuela took place in Russia 30 years ago. Remember that time? Man does 30 years make a big difference.

      4. “China may not like us but they would collapse with out us. Putain on the other has little need for us. He is bent to dominate us any way he can.”

      Yeah? So according to you, Putin “wants to dominate” the U.S. Could you explain how and why?

      5. “Putain is evil but needs to be respected.”

      Evil eh? Like Dr. Evil? What does “evil” even mean? What has he done that is “evil”? Some facts (over perceptions) would be appreciated.

      6. “I sat and listen to a man last year in a legal fund transfer lose nearly a million dollars to the Russian Mob. He took many safe guards but was still hacked by some very sofistcated means that may also have had ties to owned political people.”

      Wait, so the “Russian mob” hacked this man that you speak of? Wow, they really must have come a long way from cutting fingers and dumping bodies in cement.

      The first rule of hacking is that you don’t leave a trace. So anyone who tells you that party 1 hacked party is is full of it — because it’s almost impossible to tell. And in the few rare cases that you CAN tell, the evidence was left on purpose so as to blame someone else.

      7. “It may not be the Stalin era but it is the Putain era. Don’t be fooled by our shirtless comrade.”

      I’m far from “being fooled” my friend. For starters, I speak Russian fluently, which helps a lot. I would really recommend seeking information outside of the U.S. mainstream media, all of which have (ironically) a single agenda.

      Reply
  10. One thing that I found quite odd is that GM set a low-cost brand specific for Russia and other CIS countries, Ravon, which is selling rebadged versions of the previous-generation Spark, Aveo, Cobalt (the Brazilian one) and Optra, all reportedly assembled at a former Daewoo plant in Uzbekistan.

    Reply

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