General Motors has been slowly, but steadily reducing its global operations, with the latest move coming after the American company agreed to sell its 50-percent stake in the GM-AvtoVAZ Russian joint venture which builds the Chevrolet Niva SUV.
GM’s share in the company will be bought by its joint venture partner, the Renault-owned AvtoVAZ Group. As a result, GM-AvtoVAZ will become a wholly-owned subsidiary of AvtoVAZ Group, ending GM’s presence as a manufacturer in Russia.
According to the agreement, the plant in Togliatti, in the Russian Federation, will continue to build Niva off-roaders under the Chevrolet brand for a certain period of time, with the vehicle to be rebadged as a Lada later on. This means the automaker will have two Nivas in its lineup since Lada still sells the older Niva, which is marketed as the Lada 4×4 in Russia. To reflect the new ownership status, the GM-AvtoVAZ company will be eventually renamed too.
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A statement released by AvtoVAZ said there will be no changes for employees of both companies. Additionally, existing contracts with suppliers and Niva dealerships will remain in place for the transition period. The financial terms of the deal were not disclosed. The Chevrolet Niva successor, which was spotted testing in 2015, was not mentioned either in the Russian automaker’s statement, so we don’t know if the transaction includes it.
“I’m thankful to our GM partners for over 18 years of fruitful cooperation. Within the agreement AvtoVAZ is getting the second off-roader in the product range, that will organically supplement the legendary 4×4 and support AvtoVAZ future development,” said Yves Caracatzanis, AvtoVAZ President and CEO.
Opened in 2001, the Togliatti factory has a capacity of 100,000 vehicles a year and is located close to AvtoVAZ main production base in the same city on the shores of the Volga river. The plant builds the Chevrolet Niva, a modernized version of the Soviet-era Lada Niva developed with GM’s input.
GM offloading its 50-percent stake in the GM-AvtoVAZ joint venture follows the decision taken in 2015 to reduce its presence in Russia. At the time, the U.S. automaker pulled out the Opel brand (subsequently sold to PSA Group) and several mainstream Chevrolet models from the local market.
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