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GM planning to build three Chevrolet models in Warsaw

Automotive

General Motors Corp., the world's largest automaker, plans within two years to begin producing three Chevrolet models at a plant in Warsaw as the company seeks to boost European sales.

The Detroit-based carmaker will hire UkrAvto, a Ukrainian company that owns the factory, to build the cars under license, Marc Kempe, a GM spokesman, said in a telephone interview yesterday. The plant will produce the Aveo sedan beginning next fall and two new hatchbacks in 2008. GM expects the factory to build 150,000 cars in the „mid-term,” the company said in an e-mail. Boosting sales outside North America is key to CEO Rick Wagoner's plan to overcome the 8.8% drop in US purchases from 2000, when he became chief, to 2005. While GM was sliding in the US, Wagoner engineered a 28% sales surge abroad.

Last year, for the first time, GM sold more cars and trucks outside the US than inside it. GM is introducing new versions of its European models, including the Opel Corsa small car, to counter falling sales and win back customers lost to competitors Volkswagen AG and PSA Peugeot Citroen. GM has also used third-party contractors to build its cars at other European plants. A factory in Kaliningrad, Russia, is operated by the Russian company Avtotor, and produces the Hummer H3 and Chevrolet Aveo, Lacetti, Rezzo and Evanda models. GM this year also broke ground on a new plant in a suburb of St. Petersburg, Russia. Avtotor also builds cars for BMW AG and Kia Motors Corp. (Bloomberg)

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