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. Last Updated: 07/27/2016

GM Bids for Stake in Automaker AvtoVAZ

DETROIT -- General Motors said Tuesday that it had bid for a "significant" stake in the country's biggest automaker, AvtoVAZ.

"We have made a bid we consider to be appropriate," GM spokesman Marc Kempe said.

Kempe, who declined to specify the size of the bid or the offer, said GM was interested in exploring further cooperation with AvtoVAZ as one way to "expand our footprint in Russia."

GM has a joint venture with AvtoVAZ at a Russian plant, which produces the Chevrolet Niva sport utility vehicle and the Chevrolet Viva sedan.

Faced with declining demand in its home market, GM is looking to increase its presence in emerging markets such as Russia.

The country is on track to become the biggest market in Europe by 2011, with annual demand reaching 3.3 million cars, according to forecasters.

AvtoVAZ's parent, state arms exporter Rosoboronexport, is looking to sell a minority stake in the company to a foreign investor.

In addition to GM, the company is talking to Italian carmaker Fiat and French automaker Renault, and plans to announce its choice in the coming weeks.

GM chief financial officer Fritz Henderson last week told financial analysts that the biggest U.S. automaker should have moved earlier to localize "more production in Russia," JPMorgan analyst Himanshu Patel said in a note for clients.

Henderson said GM's profit margin in its European operations had been pressured in the third quarter in part because it did not have enough capacity in Russia, Patel said.