GM: Investing in Russia

AmCham Investment Committee

July 2007

Russia: a unique heritage

Russia: unique road conditions

What do Customers want? (a helicopter....)

State of the art is possibleGM applies world class best practices

GM applies world class best practices and standards

Russia does pose unique challenges….. What do the road signs really mean?

Russian Market: 2005 - 2006

Источник: Отчет Ассоциации Европейского бизнеса; www.gks.ru

Sales dynamics of new passenger cars

44%59%

56%

41%

2005 2006

Foreign Russian

+23%

Sales of new passenger cars of foreign brands, units

604816

1 008 826

2005 2006

+66,7%

Sales of new passenger cars of russian brands, units

770142697472

2005 2006

-9,4%

Russian Market: 2005 - 2006

Level of automobilization, per 1000 people

Russia, 220

Europe, 400

USA; 500

0

100

200

300

400

500

600

Sales volume of new passenger cars, th.units 1866

152413861099

0

500

1000

1500

2000

2003 2004 2005 2006

Sales of new passenger cars in terms of value, billion $

23.6

34

0

10

20

30

40

2005 2006

+26,1%+10%

+23%+44%

Potential growth

180

Russian Market by Price Segments(new Russian and foreign passenger cars sales)

20%

7%

12%

80,1%74,1%

62,9%

49,2%

7,4%8,4%

13,2%

4,7%

10,7% 4,6%3,4%

3,1%5,8%

3,2%8,4%6,6%5,6%

0%

20%

40%

60%

80%

100%

2003 2004 2005 2006

above $ 30.000

$ 25.000 – 30.000

$ 20.000 – 25.000

$ 15.000 – 20.000

$ 10.000 – 15.000

less than $ 10.000

Source: www.rbc.ru, report «Automobile market of Russia» 2003-2006

Sales of new passenger cars in Russia in terms of value (billion $) in 2005-2006

Other russian

cars; 3,2%

LADA; 19,8%

Used foreign cars; 20%

New foreign cars; 57%

Other russian

cars; 2,4%

LADA; 14,4%

Used foreign cars; 14,2%

New foreign cars; 69%

2005 ~ 23,6 billion $ 2006 ~ 34,0 billion $

Sources: www.ladaonline.ru – analytical web-site

GM manufacturing in Russia - GM-GM manufacturing in Russia - GM-AVTOVAZAVTOVAZ

Joint Venture: 41.6% General Motors 41.6% AvtoVAZ 16.8% EBRD

Total Investment $238.2m Major re-use of GME used equipment

• Employees 1249• Total area 56 200 sq.m.• Capacity 96 000/yr. 3–shifts• 14 JPH, 2 shifts, currently• $ 467 Mio. turnover 2005

PRODUCTSNIVA VIVA

JV PROJECT HISTORYFeb 2001 - GM Board of Directors and AVTOVAZ approvals

June 2001 General Framework Agreement signed by GM, AVTOVAZ and EBRD

August 2001 - 1st Board of Directors meeting

Temporary registration of the company *Effective implementation from Foundation to Market

13 Months Used equipment AVTOVAZ paints bodies for 7

months.

Oct 2001 Lease of land and registration of buildings

Dec 2001 Permanent registration of GM - AVTOVAZ

Feb 2002 First B.O.D. meeting in Togliatti

23rd Sept ’02

23rd Sept ’04

Chevrolet Niva S.O.P.

Chevrolet Viva S.O.P.

2004 20052006

Units0

500

1000

1500

2000

2500

NAV assembled Units

Units

GM manufacturing in Russia - Kaliningrad

• NAV SKD program• SOP, (start of production) June

2004: Tahoe, TrailBlazer & H2• SOP, May 2005: Cadillac CTS, STS,

SRX• SOP, April 2006: Hummer H3• SOP, October 2006: Cadillac BLS• SOP, November 2006: Cadillac

Escalade• SOP, October 2006: Chevrolet

Epica, Rezzo, Lacetti, Aveo

0

1000

2000

3000

4000

5000

2004 2005 2006 2007 plan

NAV Assembled units

units

770

2045 1972

GM manufacturing in Russia – GM Auto LLC - GM Manufacturing St.Petersburg plant

• SKD:

• SOP SKD assembly September 2006

• Product: Chevrolet Captiva

• Capacity 7000 per year two shifts.

• 3rd shift in planning phase

• Possible new product: Opel Antara

• CKD:

• SOP CKD production end 2008 - beg. 2009

• 2 shifts, 50000 per year.