GM to build plant in Russia

MOSCOW, May 29, 2006; Reuters reported that General Motors Corp. will build a new car plant in Russia and invest $200 million in the project, Russian Economy Minister German Gref said on Monday, Interfax news agency reported.

Gref told President Vladimir Putin that GM had signed an agreement with the Economy Ministry to build a factory outside the northern Russian city of St Petersburg. The factory will produce three car models, the agency said.

A spokesman for Russia's Economy Ministry said a deal with GM had been signed but declined to comment on the details.

Volkswagen signed a deal on Monday to spend 370 million euros ($472 million) to build an assembly plant in Russia's Kaluga region, the Russian Economy Ministry said.

GM and Ford Motor Co. and France's Renault already have car plants in Russia and Japan's Toyota Motor Corp. started building a huge plant near St. Petersburg last year, eager to tap booming demand for modern cars.