GM Uzbekistan Joint Venture to build and sell Chevrolets

General Motors, the world’s largest carmaker, announced today a joint venture with UzAvtosanoat to assemble and distribute Chevrolet cars in Uzbekistan, the central Asian republic and part of GM Europe region. The joint venture, which will be called GM Uzbekistan, will extend Chevrolet’s rapid expansion in Eastern Europe and Asia. “Chevrolet has become the fastest growing brand in Europe, demonstrating its strong appeal especially in the opportunity markets of Eastern Europe”, said Carl-Peter Forster, President of General Motors Europe. “The start of operations in Uzbekistan and the launch of a series of new Chevrolet models will help us continue our rapid growth.” Sales of Chevrolet models in Europe have increased 32 percent year-to-date, with 328,000 units registered through September. Chevrolet is on track to reach the 450,000 unit mark this year, a more than 30 percent increase over 2006.

Under the terms of the joint venture, General Motors will hold a 25 percent equity stake with the option of increasing this amount in the future. General Motors will provide new technology, manufacturing expertise and training for the joint venture, which will have access to the portfolio of GM’s largest and fastest growing global brand, Chevrolet. Senior GM managers will hold key positions in the new joint venture, particularly in manufacturing, quality, and sales and marketing.

“We are very pleased to join forces with our reliable manufacturing partner in Uzbekistan,” said Michael Grimaldi, President and CEO of GM Daewoo Auto & Technology. “Demand is high around the world for the new Chevrolet models we build in Korea. The new joint venture means we will have added manufacturing capacity to assist us in meeting the growing demand for our cars in Central Asia and Eastern Europe.”

The GM Uzbekistan manufacturing plant, situated in Asaka, Andijan Province, 350km from the Uzbek capital, Tashkent, has a total manufacturing capacity of 250,000 units which, over time, is to be fully utilized for producing Chevrolet cars. The first three Chevrolet models, Captiva, Epica and Tacuma, will be assembled from SKD kits starting immediately, with other carlines to be added for assembly from CKD kits and full-scale production over the next three years.

“Entry into the General Motors family gives access to a modern model line and modern automobile technologies”, asserts Rustam Azimov, Vice Prime Minister of the Republic of Uzbekistan. “Quality improvement, growth of production and consumer requirements’ satisfaction in Uzbekistan and in other countries, where Uzbek cars rightly deserved popularity and recognition, these are key points to which the new joint venture will focus on”.

The new Chevrolet models will be sold initially at seven showrooms in Tashkent and other major Uzbek cities. By the end of 2008, the dealer network is expected to grow to over 60 showrooms as the Chevrolet range for the Uzbek market is extended to additional carlines.

Until now, the Asaka assembly plant, which started production in 1996, has been building the Daewoo Matiz, Nexia and Damas for sale both in the domestic and neighboring markets. These models will be lined up along with Chevrolet models: Captiva, Epica and Tacuma during the interim period.

“The newly created enterprise will increase production volumes to 250 thousand cars per year”, said Ulugbek Rozukulov, the Chairman of Board Uzavtosanoat SC. “Besides, along with production of new models, we are planning to implement a number of localization projects of KD parts in Uzbekistan, which also will contribute to the development of the industry”.

The assembly plant will begin using GM’s common Global Manufacturing System, in which performance is improved through the consistent adoption of five principles: people involvement, standardization, built-in quality, short lead times and continuous improvement. The principles are interrelated and implemented as a complete system. The plant will also be integrated into General Motors’ global purchasing and supply chain with a view to increasing the quantity of components and materials sourced on the domestic market.

With a population of 27 million (up 7 million in the past 15 years), Uzbekistan is an auto market with significant potential for further expansion. The country’s economy has grown by an average of 7 percent over the past five years. In 2006, vehicle sales reached a total of 65,600, 19 percent more than in the previous year.