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. Last Updated: 07/27/2016

GM Halts Blazer Production at Tatarstan Plant




General Motors has suspended assembly of Blazer sport utility vehicles at its joint venture with ElAZ automaker in the Russian republic of Tatarstan amid low sales, company officials said Wednesday.


"I am looking out my window at rows of beautiful SUVs [sport utility vehicles]," said Dmitry Sholga, Russian public relations director of Opel, GM's European subsidiary. Some 1,200 Blazers sit unsold in the factory parking lot.


He and other officials were quick to point out, though, that the joint venture is by no means dead. The plant is shifting from the kit production of Blazers to assembling the mid-size Opel Vectra sedan.


"In the most literal sense, yes, screwdriver assembly [of Blazers] has technically been halted," Sergei Cherpaliuk, deputy director of ElAZ, said by telephone from Tatarstan. "But that does not have anything to do with plans to begin different, more advanced production."


ElAZ workers assembled the last Blazers in December. The plant has been selling under 2,000 cars a year, much less than the projected 50,000 when the plant opened.


No date has been set for resuming Blazer production, company officials said, adding only that GM is committed to building a sport utility vehicle of some sort in Russia.


"We feel we need an SUV, and the Blazer is well-adapted to that role," Sholga said.


"We're looking past the crisis, and I don't see why we can't resume production fairly quickly with an off-road vehicle, although it might not necessarily be the Blazer," he said.


Sholga was unable to specify which other off-road vehicle might replace the Blazer in Russia.


Other models currently in production overseas are larger and more expensive, which makes them unlikely candidates for the cost-conscious Russian market.


The plant is now being outfitted for the production of Opel Vectras, Cherpaliuk said. The first 50 assembly kits are expected to arrive in May.


Given current market conditions in Russia, the move to the lower-cost vehicle makes good sense, analysts said.


"The cheapest Russian cars are what's selling best right now, and the extreme high end of the market has done relatively well," said Kim Iskyan, a retail analyst at MFK Renaissance.


"But GM is making a car that falls into the very broad middle range of the market that is not interested in buying right now," he said.


Whatever the economic motivations of stopping production of the sport utility, the failure of the Blazer in Russia is a political embarrassment for the Russian and Tatarstan political leadership, which between them holds a 75 percent stake in the joint-venture.


The Blazer assembly line was opened in December 1996 to great fanfare with former Prime Minister Viktor Chernomyrdin in attendance.


It was hoped that eventually 70 percent of the Russian Blazer's parts would be supplied by domestic producers.


However, when Blazer production was halted, only the seats and battery were being produced locally.


GM's move is only the latest in a series of setbacks for foreign automakers that have attempted to set up full-scale production in Russia.


Several projects worth hundreds of millions of dollars in investment have been announced in recent years, but none have moved beyond the initial screwdriver phase of production, in which cars are assembled entirely from imported parts.


Others have been delayed indefinitely because of the effects of the August crisis on Russian car buyers' pocketbooks.


"A lot of people have been looking at Central and Eastern Europe, saying they are going to invest gazillions of dollars," said one European-based auto analyst who asked not to be identified.


"But you should take a very jaded look at anybody's projected investment figures."