FRANKFURT (Reuters) - General Motors is considering building Opels directly in Russia along with its already popular Chevrolets to satisfy higher than expected demand for its German entry-level premium brand.
"We don't produce Opels yet in Russia, but we will have to do down the line," GM Europe President Carl-Peter Forster said on Tuesday, adding that he expects Russia to eventually become his division's largest market on the continent.
GM could begin assembling Opels from knocked-down kits in one to one and a half years, he said, by which time sales of Opel brand cars in Russia could already crack 100,000 units.
"We achieve with most of our cars sold in Russia higher average revenue per vehicle than in Western Europe and in principle better margins," Forster added.
While he said GM Europe was having enough difficulty satisfying demand in Russia, investing in further capacity was risky for the company since it remained unclear how much longer hefty tariffs that penalise imports would remain in place.
"The largest risk at moment for me is when does Russia join the World Trade Organisation and how do the import tariffs look in 10, 15 years," he said.
Expanding its manufacturing footprint in Russia to escape the tariffs was problematic since production plants are built with a time frame of 25 years, according to Forster.
As a result, GM Europe is looking to expand its cooperation with Russian carmaker AvtoVaz.
"We're discussing that," he said.
