General Motors Increase Investment and Capacity at New St. Petersburg Assembly Plant

General Motors Europe President, Carl-Peter Forster, announced today that the world’s largest car-maker will more than double the originally planned capacity of the new assembly plant it is building in Shushary on the outskirts of Russia’s second city, St. Petersburg, to 70,000. “Russia is our biggest market for Chevrolet in Europe,” said Forster. “Demand continues to grow and we will be in an even better position to meet that demand when Shushary goes on stream in 2008.” The Russian vehicle market became the fifth largest in Europe in 2006 with year-on-year growth of 22 percent. General Motors sold more than 132,000 cars on the Russian market in 2006, of which over 84 percent were Chevrolets. In the first two months of 2007, 25,981 GM cars (20,805 Chevrolet) were sold in Russia.

General Motors is investing $300 million in the St. Petersburg project. The new plant will complement existing GM operations in Togliatti and Kaliningrad. GM Avtovaz in Togliatti, established in 2001 as the first joint venture on the Russian automotive market, builds the Chevrolet Niva and Viva. In 2004, GM partner Avtotor began SKD operations in Kaliningrad where Cadillac, Hummer and Chevrolet models are now assembled. The new plant in St. Petersburg will produce Chevrolet Captiva SUVs and a new generation of compact cars from CKD kits in two shifts. Start of production is scheduled for the end of 2008.

The new plant will operate according to General Motors’ global manufacturing system to ensure the highest levels of quality. It will employ about 900 workers, engineers and managers. They will be trained both at GM manufacturing facilities and the GM academy. The plant will employ both experienced employees and young specialists. "GM has been a pioneer investor in the Russian automobile market. Our latest investment reflects our desire to build our cars and trucks in the major markets that we sell them, and our commitment to supporting industrial growth and employment in the Russian market", said Warren Browne, GM Executive in Charge of Russia.

Every stage of the project development took place in close collaboration with the St. Petersburg city authorities who have created favourable conditions for foreign investors. The recently approved general plan of development of St. Petersburg and a new set of tax laws and new rules of development have created unprecedented opportunities for business to develop in the city on the Neva. "We are very pleased with General Motors’ decision to increase their plant investment and production volume. The company has made the right choice to build their plant in St. Petersburg.

On our side we will do everything required for the project to be realized on time. We are investing heavily into modernizing the infrastructure and development of the new industrial zones. In 2007 there were additional funds allocated in the St. Petersburg budget to train qualified specialists for the new facilities. The set-up of new technological automotive production facilities in St. Petersburg facilitates the establishment of a new industry sector for the city – that of the car assembly industry. We believe St. Petersburg is well positioned to become the “Russian Detroit ", indicated Valentina Matvienko, Governor of St. Petersburg.