Automakers see potential in Russia

NIZHNY NOVGOROD, Russia — Sleek and glistening, General Motors sedans creep off the assembly line here. They are as new as cars can get. And so is the assembly line, where the first test cars emerged this month.

Even as GM is scaling back elsewhere in Europe, the company is ramping up production in Russia, a country that is becoming a bright spot for GM and much of the rest of the automotive industry.

Trickle-down oil wealth and the spread of easily accessible auto financing are lifting sales, which rose by 40 percent in the first half of this year compared with the same period a year ago. GM, Ford, Volkswagen, Nissan and Renault are all opening new plants, or intend to do so soon.

The new GM line in this picturesque town, an old center of the Russian car industry on the Volga River, will manufacture 30,000 Aveo sedans a year. Cars, held up on jacks, move along the assembly line and end up in a brilliantly illuminated inspection room, where every inch is carefully examined; the factory is trying to get defects down to GM standards. If all goes well, production will start in January.

The site is one of half a dozen facilities that GM runs in Russia, where the Detroit carmaker intends to invest $1 billion over the next five years. The money is a good bet today, analysts of the Russian market say, for the same reason that politics here recently got a jolt with street protests: The Russian middle class is rising and becoming a force in both commerce and public life.

“I would put Russia in the same breath as China,” Timothy E. Lee, the head of GM’s international division, said at a groundbreaking ceremony last summer for a plant in St. Petersburg, which will make midprice sedans. The Chinese car market has expanded at a frenetic pace over the past decade, sales reports show.

Overall, Russian car sales are now approaching 3 million cars annually, according to the Association of European Businesses, a group that tracks sales here as part of its efforts to promote trade between Russia and the European Union.

Russia is projected to surpass Germany and become the largest car market in Europe in 2014. In August, Russians bought more cars than Germans did, before sales tapered off in the fall.

“It makes sense to invest where you have a good growth,” Vladimir Bespalov, an automotive analyst with VTB bank, said in a telephone interview. “This is the trend, and the growth is in the emerging markets.”