In a recent post we talked about General Motors looking to India as one of its key strategic locations for growth.
Another country they've been working hard to grow in is Russia, where at a domestic level they sold 132,600 vehicles in 2006. The company has also increased the number of dealerships they sell through in Russia, from 78 in 2005, to 354 in 2006.
An AP report cited the European Bank for Reconstruction and Development, saying Russia has approximately 157 cars for every 1,000 people in the country. That's a lot of room for growth in the developing country.
With the oil industry being a major driver of wealth in Russia, it is becoming a major market to compete in for automakers.
What General Motors (GM) wants to do here is go beyond a joint venture with AvtoVaz, which has been in place since 2001, and buy a stake in the company. The existing relationship has come on hard times, as the Russian government basically took control of AvtoVaz in 2005. AvtoVaz is the largest carmaker in Russia.
A spokesman for GM, Marc Kempe, said a formal bid for a stake in the company has already been presented. How big a piece of the company GM is trying to get and what they're willing to pay is unclear at this time.
GM currently has two plants in Russia, and is building a third close to St. Petersburg, where production is projected to begin sometime in 2008.
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