General Motors has picked out a location for a new factory near St. Petersburg and is set to submit an application to the city government within the next two weeks, a local official said Thursday. The U.S. carmaker looked at several sites but has chosen Shushary, just outside St. Petersburg, an official in the city's economic development department said. The official requested anonymity, citing ongoing negotiations.
"They are preparing an application," he said. "They came to the conclusion that [Shushary] suited them."
Mark Kempe, a spokesman for GM Europe, on Thursday confirmed that the company was interested in "extending, not replacing" its presence in the country, but said, "We have not taken a final decision to build anything anywhere."
The Financial Times on Thursday cited sources close to GM as saying the carmaker had already approved financing for its Russian factory, adding that its fate hinged on the future of GM's troubled venture with AvtoVAZ.
The official declined to give any details of the project ahead of the official application, but said the U.S. carmaker's plan was similar to that of Toyota, which is due to begin producing cars at a $140 million plant in Shushary next year.
Nikolai Asaul, deputy chairman of St. Petersburg's committee on investment and strategic projects, said Shushary offered "very convenient logistics" as it was close to a ring road and the highway to Moscow. Asaul also said GM "was close to making a decision."
While tax breaks had played a role, he said carmakers were drawn to the city by its "proximity to a sea port and mutual understanding with the authorities."
Nissan said Tuesday it would also build a plant in St. Petersburg.
