Aug 22, 2014 11:40 AM EDT
GM Will Reduce Production at Russia Plant For 3 Months

General Motors said this week that it would reduce production at its plant near St. Petersburg due to continued slowdown of the Russian auto market.

The plant makes Chevrolet Cruze, Opel Astra, and Chevrolet Trailblazer vehicles. It will only work four days in August, and four days in September.

GM's plant will extend to eight in October, a company spokesman said to Reuters.

Car sales have dropped in Russia during the first seven months of 2014 as economic growth has slowed, forcing people to put off large purchases.

"When you look at Russia, the current environment is difficult," said Ford CEO Mark Fields, according to The Detroit Free Press. "But it's a big, important market, and it has the potential to be the largest market in Europe over time. The business environment right now is very challenging and fluid."

Western sanctions over the crisis in the Ukraine has also hurt the automaker.

Russia's car market gathered pace in July, with sales sliding 23 percent year-on-year after a 17 percent fall in 2013, according to the Association of European Businesses (AEB).

Chevrolet cars fell 45 percent in July, year-on-year, while Opel sales tumbled 25 percent, according to AEB data.

"The market weakness has not reached its bottom yet. Sales in the second half of 2014 are expected to reach a level of 1.2 million units, equivalent to a 16% reduction compared with the same six-month period in 2013," said Joerg Schreiber, chairman of the AEB Automobile Manufacturers Committee, according to The Detroit Free Press.

By 2015, GM wants to complete boosting production capacities from 98,000 to 230,000 cars.

The plant operates in two shifts, with about 2,000 workers when including office personnel.

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