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27 Oct, 2009 08:11

Russian Opel rolls off the line as Magna-Sberbank deal awaits signoff

The first Russian produced Opel has come out of the Avtotor Kaliningrad plant, ahead of the finalisation of the GM-Sberbank-Magna deal for the Russian Canadian joint venture to buy into GM’s German arm.

The first Opel comes off a Kaliningrad production line. This week has seen the first of up to 25000 cars GM and Russia’s Avtotor plan to assemble in Kaliningrad. That’s despite Opel sales in Russia being down 62% this year, but Chris Gubbey, Managing Director, GM Russia and CIS, says that the production is for the longer term and that the market might rebound quickly.

“We, like most people, don’t think there is going to be a rapid resurgence next year. Marginal improvement, but it’s very difficult to predict. If the price of oil stays at $80 for a prolonged period we might see that recover much quicker than people are predicting today.”

GM says Opel Astra is one of the its best selling cars in Russia, and by making them in Kaliningrad they will be more competitively priced on the domestic market – being freed from import tariffs.

The Kaliningrad Avtotor plant is assembling the Opel Astra and Zafira,  adding to other output which includes Hummer, BMW, and Chevrolet models.  

The plant will be joined in making Opel’s by GM’s St Petersburg plant next year, with other Russian sites to join in when the GM-Magna-Sberbank deal is finalised, according to Ivan Bonchev, Senior Manager at Ernst & Young.

“In such a deal where Russia is supposed to be, if the deal happens a major partner, then obviously any existing capacity is currently being screened and assessed whether it would make sense both economically and strategically to be used.”

The long running Opel sale has seen the Magna Sberbank consortium agree to buy 55% of GM’s German in September, after months of negotiations which saw it beat off a rival bid and overcome concerns about plant closures and intellectual property. General Motors is expected to finally approve the deal at a board meeting on November 3.