Another Major American Automaker Leaves Russia

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"Back in the U.S.S.R." Not quite.

Last March, Ford ended its Russian joint venture Ford Sollers, which saw the American automaker leave the Russian market entirely. Russia's Sollers assumed control of the venture Ford previously led. And now, another major American automaker is officially leaving Mother Russia.

Reuters reports Russia's largest automaker, AvtoVAZ, has just announced plans to buy out GM from the joint venture. This brings to an end the Chevrolet brand in Russia as well as GM's presence building cars in the country. Like Ford, GM experienced difficulty in Russia's car market over the past few years due to western sanctions, which were first imposed in 2014, along with falling oil prices, and the weakened ruble. Prior to 2014, the Russian car market was one of Europe's top performers.

Chevrolet
Chevrolet

As we reported earlier this month, Russian car sales, in general, are in bad shape due to the weakened currency that's making it difficult for citizens to buy new cars. The Russian government has already approved a subsidy plan, set to take effect next year, worth about $78.3 billion as part of an effort to help spur the local new car market. For GM, however, it was too little too late. AvtoVAZ has since signed an agreement to buy GM's 50 percent stake in the venture which, up until now, built the Chevrolet Niva.

Never heard of the Niva? It's not anything like a rebadged Chevrolet Cruze or Malibu. Quite the opposite. The Niva is actually based on an old Soviet-era design, though GM engineers were brought in to make some necessary improvements. However, the agreement allows AvtoVAZ to continue building cars under the Chevrolet brand for "a certain period of time."

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Chevrolet Russia/Facebook
Chevrolet Russia/Facebook
Chevrolet Russia/Facebook

The long-term goal is to switch to Russia's own and established Lada brand. It was only a few years ago when more familiar Chevys were built in Russia at a production plant near St. Petersburg. These included the Chevy Cruze and the old Trailblazer, along with the Opel Astra. Opel, of course, was sold by GM to PSA (along with Vauxhall) in 2017. GM ended those manufacturing operations for similar reasons. The conflict with Ukraine at the time was also a factor.

Chevrolet Russia/Facebook
Chevrolet Russia/Facebook
Chevrolet Russia/Facebook

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