General Motors (GM) has clearly decided that its future is on the Eurasian landmass. The company has unveiled new expansion plans that could save its struggling European operations, expand operations in a growing auto market and tap the manufacturing capacity it is developing in China. These plans could make GM one of the best growth stocks in the automotive sector.
General Motors Making Russian Expansion
Having had success in China, General Motors is making plans for a major expansion in America’s other Cold War rival, Russia. Specifically, GM CEO Dan Akerson is hoping that the Russian market can bail out his ailing Adam Opel GP division. If successful GM’s Russian adventure will boost its stock by demonstrating that it can expand its overseas operations.
The Russian expansion plans call for doubling production at GM’s plant in Russia’s old imperial capital of St. Petersburg. Capacity will be increased from 98,000 to 230,000 vehicles by 2015. The focus of the expansion will be Opel’s Astra Sedan. Popular American vehicles, such as GM and Chevy trucks and Cadillac sedans, will also be assembled there.
Beyond St. Petersburg, GM is planning to spend $1 billion to build new factories and expand capacity over the next five years. The location of the other new factories has not been announced yet, but they will probably be in other historic Russian industrial centers, such as Magnagrosk and Yekaterinburg.
This kind of aggressive expansion could be very good for GM’s stock because it is the only thing that can save the European division.To continue reading, click here.