GAZ Expected to Reach Contract Manufacturing Deals with GM and VW in February

NIZHNY NOVGOROD, Russia - Russian car maker GAZ expects to reach deals with General Motors and Volkswagen AG on contract manufacturing at its Nizhny Novgorod facility by the end of February, Bloomberg reported, quoting GAZ chief executive officer Bo Andersson.

Agreements with the two vehicle manufacturers will see GAZ produce 30,000-40,000 Chevrolet Aveo B-segment cars per year for GM, and around 100,000 cars for Volkswagen in Nizhny Novgorod, Andersson said.

GAZ currently builds only commercial vehicles at the plant, after its sole passenger car, the Volga Siber, was phased out due to poor sales, on October 31 last year.

GAZ has invested around half a billion dollars in the last few years to modernize the plant, which is now not being used. According to Andersson, contract manufacturing deals could be one way to utilise those investment.
On December 23, 2010, Daimler and GAZ signed a memorandum of understanding to assemble the Mercedes-Benz Sprinter LCV in Russia. The plans also call for local production of engines, transmissions, axles and other components, which will feature in the Sprinter van.