GM Seeks Growth With New Manager

BloombergGubbey
General Motors announced on Thursday that Chris Gubbey would head its Russia division as it seeks to expand and cement its market share in the country.

Gubbey will succeed Warren Browne, who will focus on GM's growth strategy for Turkey, from Feb. 1.

"Russia is quickly becoming one of the largest car markets in the world," GM chairman and CEO Rick Wagoner said in a statement. "In his new role, Gubbey will continue to drive our expansion in this vital high-growth market."

Gubbey, 51, is currently chairman and managing director of GM Holden, a GM subsidiary based in Melbourne, and oversees GM operations in Australia and New Zealand.

In moving to Russia, he will be in charge of one of the most vital world markets for the company. Russia, along with Britain, Italy, Ukraine and Greece, was the main contributor to GM's growth last year. GM said it almost doubled its sales in Russia to 258,835 units last year. GM's market share in Russia reached 9.3 percent last year, up from 6.3 percent in 2006, Ernst & Young said.

Under Browne, who took over in February 2004, GM expanded in Russia by choosing St. Petersburg for a $115 million plant. Browne also had to deal with state directors from arms trader Rosoboronexport when they questioned a GM venture with AvtoVAZ in 2005.

"Warren's four years were extremely eventful for GM in Russia," GM spokesman Marc Kempe said.

GM is the only foreign carmaker in Russia that both builds cars on its own and with a local partner. Its models are also assembled at a private plant in Kaliningrad, as well as in Ukraine, Kazakhstan and Uzbekistan.

Ivan Bonchev, an analyst with Ernst & Young, praised Browne's record, saying the company's sales numbers speak for themselves. "He's got a really good understanding of the market and has good connections," he said.

Gubbey joined GM Holden last July after serving as vice president of Shanghai GM, a joint venture in China.

In December, GM lost a bid to buy a stake in AvtoVAZ to Renault, and the carmaker is now believed to be in talks with billionaire Oleg Deripaska's GAZ.

Securing and working with a local strategic partner may prove to be one of the most challenging tasks for Gubbey. Kempe declined to speculate on the outcome of those talks. "How long is a piece of string?" he said. "We'll talk about the results when we'll have them."