General Motors will build a greenfield manufacturing facility in the Shushary region of St. Petersburg, Russia. The plant will go on stream in late 2008 with initial full-year capacity of 25,000 units. It will produce Chevrolet Captiva SUVs and a new generation of compact cars from CKD kits. Starting as early as September this year, a separate SKD facility in the city of St. Petersburg will begin operation. This facility will assemble the Chevrolet Captiva until the Shushary facility begins production. Total investment in the new facilities amounts to $115 million. At a ground-breaking ceremony in Shushary today, General Motors Chairman and CEO Rick Wagoner said, "This project clearly demonstrates our commitment to Russia as one of the world's fastest growing auto markets. With the addition of this new, wholly-owned facility, GM and its partners will be able to assemble more than 100,000 cars a year in Russia."

The new assembly plant on the outskirts of St. Petersburg will employ more than 700 people who will be recruited specifically for their ability to set up and operate a world-class production facility. "We are delighted that General Motors has recognized the value of strategic investment projects in our city. We will endeavor to repay this trust by ensuring that General Motors is satisfied with the choice of its newest manufacturing plant. It is my fervent hope that General Motors has blazed a trail that its suppliers will soon follow to enjoy the benefits the St. Petersburg region offers," said Governor of St. Petersburg, Valentina I. Matvienko. The facility will operate according to General Motors' global manufacturing system to ensure the highest levels of quality. In order to leverage the company's global manufacturing expertise, GM's leading assembly plants will host numerous new employees from Shushary for comprehensive training programs.

The ground-breaking ceremony for the new plant coincides with record sales for GM in Russia. More than 11,000 registrations in May represent an 80 percent increase over May 2005. "With five brands on the market, we offer Russian customers more choice than any other manufacturer," said Carl-Peter Forster, President of GM Europe. "The St. Petersburg plant and the new Chevrolet cars it builds will give us another boost in this very important market." Chevrolet is GM's best-selling brand in Russia, with sales of over 35,000 in the first five months of the year. In 2005, Chevrolet was the number two non-domestic brand on the Russian market, taking over the number one position in the month of April this year.

The separate SKD operation in the city of Saint Petersburg will go into operation in September and have an annual capacity of over 4000 units. This is an interim solution that will end when the new CKD plant in Shushary goes on stream in 2008.

GM has been active in Russia since 1992. The St. Petersburg project complements existing GM operations in Togliatti and Kaliningrad. Established in Togliatti in 2001 as the first joint venture on the Russian automotive market, GM Avtovaz builds the Chevrolet Niva and Viva. GM, with partner Avtotor, began SKD operations in Kaliningrad in 2004 and now assembles Cadillac, Hummer and Chevrolet models.

Russia, with a population of 143 million, is one of the most dynamic car markets in the world. Year-on-year sales growth has accelerated from 9 percent in 2005 to 17 percent in the first four months of this year. Vehicle ownership has now reached a ratio of 178 cars to 1000 people.