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GM car assembly plant in Petersburg ceases production

July 01, 2015, 9:51 UTC+3 ST. PETERSBURG
Full-cycle production at the enterprise was halted in March after GM announced restructuring of its business in Russia
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© ITAR-TASS/Vadim Zhernov

ST. PETERSBURG, July 1. /TASS/. General Motors has ceased production at its Russian plant in St. Petersburg. The plant’s temporary closure begins on Wednesday, GM Auto press service told TASS.

"The plant has suspended semi knocked down assembly (SKD) and will be shut down," the press service reported.

Full-cycle production at the enterprise was halted in March after GM announced restructuring of its business in Russia. SKD assembly at the plant continued for 3.5 months after that. The last workday at the enterprise was June 30.

In the period from March to late June, a total of 583 GM employees were laid off at the St. Petersburg assembly plant, the St. Petersburg employment centre said. According to the centre, 37 more employees will be dismissed before the end of the year.

The company does not disclose its production volumes in 2015. According to Director General of the Auto-Dealer-SPb analytical agency Mikhail Chaplygin, in January-June 2015, production at the St. Petersburg plant declined by more than 50%, compared to the same period last year.

In 2014, according to the Association of European Businesses (AEB), GM sales in Russia dropped by 26.4% to 257,600 cars, while the total market decline was significantly smaller - 10.3%

After several years of growth in excess of 10%, car sales in Russia shrank in 2014 as the economy weakened, battered by Western sanctions over the Ukraine crisis and sliding oil prices. The tumbling value of the rouble has caused consumers to pull back on large purchases, and raised the cost to GM and other manufacturers of importing parts.

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