'Vaccination of Sales' by New Opel Astra: Rolling Out Production in 2010

By Andriy Ivchenko, Industry Analyst
Team Leader Russia & CEE
Frost & Sullivan’s Automotive & Transportation group

Vaccination of Sales by New Opel Astra: Rolling Out Production in 2010.

“While economic plague has halved Russian automotive market sales, GM is planning to roll out production of the Opel Astra at the new plant in St. Petersburg, Russia by 2010. This is a logical step from GM to support dropping sales and to challenge traditional Opel competitors in Russia such as Ford, VW, Fiat, Renault, PSA etc as well as the main Russian rival – AvtoVAZ.

According to Frost & Sullivan estimates, the drop in sales of passenger vehicles in Russia is expected to reach more than 45 per cent by the end of 2009. Nevertheless, sales will bounce back and start growing again by 2010, which is a positive note for Opel and its new owners – Russian Sberbank and the GAZ Group. By moving production from the Arsenal plant to the new $300 million production facility in St. Petersburg, GM can better refill underutilized production capacities.

Although current forecasts indicate that Astra sales in Russia are expected to drop by almost half in 2009, Frost & Sullivan expects that Astra will enhance its position within Opel’s product line-up in Russia and generate almost 50 per cent of brand’s sales this year. If Opel’s new owners successfully negotiate with the Ministry of Trade the inclusion of the Astra into the list of models subsidized by the Russian Government, then it will be possible to expect even better sales. In any case, the localization of Astra production in Russia and favourable exchange rates provide Opel with the potential to support dropping sales.

Frost & Sullivan expects that Opel will remain among the top seven foreign car sellers in Russia by 2015, with the Astra and Corsa models driving regional sales of the brand. Therefore, further localization of production in Russia is expected to be a good remedy for curing dropping market sales for Opel or any other brand interested in the Russian automotive market.”