Boston, MA 08/26/2014 (wallstreetpr) – According to report, the well-known automotive company General Motors Company (NYSE:GM) has decided to release the expansion timings of Russian Plant. It is located near St Petersburg in Russia. GM invested as much as $300 million in this plant six years back in 2006, and now it has decided to initiate the second step of this project. Reports claim that the project will start by the first half of 2015.
Risks involved in the execution of second phase:
The current market condition of Russian Auto Market is not good. Most of the large auto makers are going through a tough time due to lack of demand. Due to these prevailing risks in the Russian auto market, General Motors Company (NYSE:GM) is reassessing its expansion plans once again. Some of the major manufacturers of GM’s Russian unit include names like Chevrolet Cruze, Chevrolet Trailblazer and Opel Astra. The company only said that it was planning to initiate the manufacturing process in Russia once again, but it did not give any hint as which brands would be manufactured in the phase two.
It is not a hidden fact that Russian Auto Market is going through a tough time right now. If taken into consideration the date provided by Association of European Businesses, one can see that Russian Auto Market has been declining since June 2014. As a result of this slump in the market condition, General Motors Company (NYSE:GM) recently announced to reduce the manufacturing process until the market conditions turns normal again. The adverse economic growth in last few years has affected consumer demand badly in Russia. Sectors like automotive, food and electricity have got affected adversely by this economic fluctuation. On top of it, the problems in Ukraine has also affected the market badly. After looking at the current market conditions and conflicts in Russia, GM has announced that its Russian plant will work for four days in August, four days in September and total eight days in the month of October.
