GM Plans Russian Factory

The automaker reportedly hopes to produce three car models from a plant outside St. Petersburg.
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GM (GM) - Get Report is planning to set up its own shop in Russia, according to media reports.

But there appeared to be some confusion about whether the automaker had signed a formal agreement to do so.

Russian Economy Minister German Gref told Russian President Vladimir Putin that GM had signed a deal to invest $200 million in a new car factory outside St. Petersburg, according to an

Interfax

news agency report summarized by

Reuters

. The factory will produce three car models.

Earlier Monday, the

Associated Press

reported that Gref¿s ministry had announced GM¿s plans for a new factory and said GM Vice President Carl-Peter Forster would sign a deal at an evening ceremony, but that the ceremony was later canceled.

A GM spokesman confirmed Monday that Forster would be in Moscow but denied that any final deal had been reached, the

AP

report said.

GM is no stranger to car manufacturing in Russia. It launched a $340 million joint venture with AvtoVaz 5 years ago, but that project has run into problems in recent months because of a parts dispute.

Also Monday, German automaker

Volkswagen AG

signed an agreement to build a nearly $510 million car plant in the Russian city of Kaluga.

GM shares finished Friday at $28.08.