Opel plans Russia comeback as PSA seeks out new markets

German carmaker Opel on Thursday said it would return to Russia after a more than three-year absence as new French owner PSA branches out in a bid to reduce the group’s reliance on the European market.

Opel will start by making three models available at Russian dealerships in the fourth quarter of 2019, the brand with the lightning logo said in a statement.

Two of the models, the Zafira Life minivan and the Vivaro transporter, will be manufactured at PSA’s plant in the western Russian city of Kaluga.

The move by car giant PSA — which also sells cars under the Peugeot and Citroen brands — will step up competition with French rival Renault, which owns Russia’s iconic Lada brand.

Opel’s previous owner, US behemoth General Motors, yanked the German carmaker from the Russian market in 2015 and closed its Saint Petersburg factory in the face of plummeting sales as the country grappled with an economic crisis and a plunging ruble.

The Russian comeback is part of PSA’s push to diversify its revenues beyond Europe at a time when US sanctions have torpedoed ambitions in Iran and the Chinese auto market has slowed considerably.

The group already announced earlier this month that it plans to reintroduce Peugeot to the United States by 2026 after some 30 years away, while Citroen will start selling cars in India in 2021.

“Russia is a large, strategically important and attractive market with a lot of potential,” Opel CEO Michael Lohscheller said in the statement.

“As a German brand with a long-standing tradition and an excellent reputation in the country, we will benefit from this.”

The initial ambitions for Russia are modest, with the firm expecting to achieve sales in the “five-digit” range by 2022, an Opel spokesman told AFP, recalling that Opel sales peaked at around 80,000 cars a year in 2012 and 2013.

PSA bought troubled Opel from GM in 2017 and immediately embarked on a major overhaul that helped the German brand book its first profit in 2018 after years of losses.

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