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GM Starts Blazer Production in Russia

12/23/96

The Associated Press reports that General Motors produced its first Chevrolet Blazers in Russia Thursday at an unfinished car plant in Tartarstan, about 900 miles east of Moscow. The company expects the four-wheel drive vehicle Blazer to sell well in Russia, a country known for its bad roads.

Prime Minister Victor Chernomyrdin, who flew to Tatarstan for the occasion, said, "We Russians are sometimes slow to get in harness, but we ride swiftly. That's why we need a good car. After that we will need good roads."

GM has set an annual production target of 50,000 Blazers for the Russian plant. Because loaclly produced vehicles avoid high import duties, GM will be able to sell the Russian-made vehicles for about $24,000 apiece--about a third of what most imports cost.

The Blazer plant--a joint venture with the Russian carmaker Yelabuga Automobile Works and the Russian government--will eventually create about 8,000 jobs at about 100 different parts plants around Russia. Currently, however, GM imports partially-assembled Blazers from Brazil and finishes them in the plant near the town of Yelabuga in Tatarstan. As the company locates reliable domestic parts suppliers, it will begin to switch over to domestically made parts, said Per Mellstroem, head of research at Brunswick Brokerage in Moscow: "that's the way auto companies do it everywhere in the world. They set up a simple assembly, and then gradually increase the local content."

GM estimated its total investment for the project at about $250 million. It owns a 25 percent stake of the venture, while the government and Yelabuga Auto Works hold the rest. GM has retained management rights.

Paul Dever -- The Auto Channel