General Motors will add 1,500 workers at its St. Petersburg, Russia, assembly plant as part of plans to boost production there.
GM plans to more than double annual production capacity at GM Auto, its St. Petersburgh plant, from the current 98,000 vehicles to 230,000 vehicles. GM said on completion of the expansion, expected by 2015, employment there would increase from 2,500 to 4,000 people.
GM said the project was the most significant development for GM’s Russian operations since GM Auto opened in 2008.
The St. Petersburg plant builds the Chevrolet Cruze sedan and hatchback and the Opel Astra hatchback, and will add production of the Astra sedan under the expansion.
The expansion of GM Auto is part of a plan announced last year by several automakers with the Russian government to lift capacity. GM said at the time it would spend $1 billion in Russia over five years, including investing to boost production at the GM-Avtovaz joint venture in Togliatti, Russia. All told, GM said the moves would boost its combined annual production capacity in the country to 350,000 vehicles.
In addition to GM, whose Chevy brand was the biggest foreign seller in Russia last year, Renault SA and Ford are among the automakers in early stages of expanding plants or moving into those sites owned by Russian partners.
The increase in Russian manufacturing capacity largely results from the government's Decree 166, which offers foreign players an exemption on customs duty for parts when they agree to ramp up local production to 350,000 vehicles a year.
The government launched the incentives in late 2010, complicating talks on joining the World Trade Organization that were finally wrapped up in December of last year.