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GM Europe Touts Flexible, Local Production

Automaker sees local production and plants that can be adapted to produce new models as the best ways to tap sales potential in Russia and other eastern nations.

BERLIN (AP) -- General Motors Corp. sees local production and plants that can be adapted to produce new models as the best ways to tap sales potential in Russia and other eastern nations, the president of GM Europe said Wednesday.

Carl-Peter Forster said GM's traditional production model was too decentralized and inflexible, particularly in the face of rising steel prices and uncertain emissions regulations.

"We want to produce where we sell," Forster said in a speech at an auto industry summit in Berlin. "And we want to have very high control over what cars we produce in what factories."

Both directives are driving GM's plans to open a third assembly plant this year in St. Petersburg. The European unit of the Detroit automaker is eager to gain a stronger foothold in a growing eastern market that Forster estimated could represent 3 million total vehicle sales this year in Russia and 700,000 in Ukraine.

GM sold 181,138 cars in Russia in the first half of this year, a 60 percent increase from the same period a year earlier.

"Russia is the market for Chevrolet," Forster said. He went on to say that he believed Opel was undermarketed in Russia and GM would promote the brand as an example of German quality and engineering.

Forster said Russian sales of Opel now match those in Spain for the first time.

Waning demand in Western Europe is being compounded by disparate government policies on emissions and buyers' increasing insistence on fuel-efficient products.

"We hope emissions standards won't only be dictated by the state, but also by the desires of customers," Forster said.

He said a uniform EU policy on emissions standards would help automakers adapt more quickly. He also promoted research into electric and hybrid electric-gas technologies.

GM Europe operates 10 assembly plants in seven countries and sells its vehicles through some 9,000 dealerships.

Along with Chevrolet and Opel, GM sells Saabs, Corvettes, Cadillacs and Hummers on the continent.

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