General Motors, facing continued losses in Europe, broke ground on an expansion of its factory in St. Petersburg, Russia, that will more than double annual production capacity to 230,000 vehicles by 2015, from 98,000 today, Bloomberg reported.
The plant will make the Opel Astra compact and Chevrolet models.
Increasing Opel sales in the booming Russian market will be a short-term help for GM while it works to implement a long-term fix for its European operations, GM CEO Dan Akerson said in a telephone interview from St. Petersburg prior to the groundbreaking.
"We're making money here with Opel," he said.
GM is introducing 12 vehicles in Russia this year after increasing combined Chevrolet, Opel and Cadillac sales in the country 53 percent last year, to 244,000.
GM is making the effort as competitors also stake out claims to the fast-growing market amid western Europe's fifth straight year of declining vehicle sales.
GM Europe, which has lost $16.4 billion since 1999, will add five Opel models in Russia.
Russia's auto market peaked at 2.9 million vehicles in 2008 before falling to 1.5 million in 2009, PricewaterhouseCoopers data show. Vehicle sales rose 39 percent to 2.65 million last year and will probably increase to more than 3 million this year or next, Akerson said.
"We're going to push north of 10 percent [market] share this year" in Russia, Tim Lee, president of GM's international operations, said in an interview in April. "We're selling 300,000 units" this year, he said. GM says it held 9 percent of the market in 2011.
GM faces increasing competition in Russia.
Chevrolet was the best-selling foreign brand in Russia last year, with sales up 49 percent to 173,484. But Renault was the 2012 sales leader through May.