GM to invest $1 bn in Russia to expand production capacity

US automobile giant General Motors (GM) plans to invest $1 billion in Russia over the next five years to expand car and component production to more than double its annual production capacity from the current 98,000 vehicles to 230,000 vehicles by 2015.

Prior to an auto show in Moscow, Tim Lee, the Detroit-based carmaker's head of international operations, said that GM will also invest the money to increase production at the GM-AvtoVAZ joint venture in Togliatti, Russia, resulting in combined annual Russian production capacity for GM of 350,000 vehicles.

When the expansion is complete, employment at the facility will increase from 2,500 to 4,000 people. They will manufacture Chevrolet and Opel models for the Russian market.

GM-AvtoVAZ is a 2001 joint venture between GM and AvtoVAZ set up to produce the GM-AvtoVAZ Chevrolet Niva, based on the Lada Niva, and the GM-AvtoVAZ Chevrolet Viva, based on the 1998 Opel Astra notchback.

Among the additional vehicles that will be produced at GM Auto is the new Opel Astra sedan, which will make its worldwide debut at the Moscow International Motor Show this month.

''General Motors is embarking on a new era in Russia, one of the world's fastest-growing vehicle markets, as part of our strategy to build where we sell,'' said GM chairman and CEO, Dan Akerson.