The GAZ Group is looking at a number of overseas destinations as potential new production locations, according to CEO Oleg Deripaska. It is looking at potential assembly locations in Lithuania, Cuba and Venezuela which would increase the firm's global production presence and give GAZ access to new markets. Deripaska did not give any details on the plans, although the firm's press department later commented that the Venezuela was the least likely destination of the three to see investment in the short term.
Significance: GAZ is looking to establish a presence in markets with potential for growth as a result of selling the vast majority of its own-brand light commercial vehicles (LCVs) in its domestic market Russia, where light-vehicle sales have declined 35.3% year on year (y/y) in the first seven months of the year. GAZ has at least outperformed the overall market, posting a 25% y/y decline to 27,565 units in the first seven months. All the locations mentioned have the possibility of providing a relatively low-cost assembly base with the ability to access new regional markets. The recent thawing of relations between the US and Cuba indicates that the country is increasingly outward-looking and open for business, and its very aged vehicle parc would make it a particularly attractive potential destination. GAZ will be looking to reverse the trend which saw sales to non-CIS countries fall by 56% y/y to RUB7.2 billion.
