General Motors decides to pull-out Opel from Russia and close its ST Petersburg factory

General Motors has announced that they will no longer be selling vehicles in the Russian market. The American automaker has confirmed that they will substantially withdraw from Russia by the end of this year. GM also said that the production facility near St. Petersburg will be closed soon with an expected loss of nearly 1000 jobs.

Handel Blatt a local newspaper reported that Opel’s CEO Karl-Thomas Neumann said that the future of Russian car market is not stable.

In an official statement, he said, “We do not have the appropriate localisation level for important vehicles built in Russia, and the market environment does not justify a major investment to further localise”. GM will end all car sales of Opel/Vauxhall models by the end of this year and only limited number of Chevrolet models will continue to be sold in the Russian markets.  The Chevrolet factory at GAZ will also end in 2015.

Cadillac sales will continue in Russia while production of the next generation Lada-Chevrolet will get a green signal from the next year. Russian economy has taken a triple hit in the last year, where crash in oil prices is the main factor. The Ruble has collapsed against the Dollar which increases the costs of imports while consumers are suffering from serious inflation. Western economic sanctions are also affecting the Russian economy. These sanctions have been imposed over the conflict in Ukraine.