General Motors announced that it would halt production at its St Petersburg plant from July 1 to August 31 after completing just two days of production following a three week factory holiday.
Mr Chris Gubbey regional president of GM said that the company would halt for the summer months on account of Russia's slackening auto demand and pick up production right before the Chevrolet Cruze hits lots here this fall.
Most major automakers operating in the country including AvtoVAZ, Ford and GAZ have had to close down their assembly plants for extended periods as demand declines. Sales of cars and light commercial vehicles in the country plunged 58% YoY in May the largest fall on record.
Mr Gubbey said that "Having carefully studied the state of the Russian auto market and the extent to which the population's purchasing power has contracted, we have decided not to force a production increase at our Russian plant.”
The plant had been on a hiatus from June 8 to June 28.
Mr Hans Jurgen Michel plant's general director said that “Employees of the factory, which opened seven months ago, will be paid two-thirds of their salaries during leave and return to their original work schedules at the end of August.”
He said that "We are doing everything possible to minimize the negative effect that the reduction in output has on the plant's workers.”
GM which invested USD 300 million to open its only Russian factory in November now employs 986 people at the plant.