GM to Open Armenia Plant

YEREVAN (RFE/RL)–US car manufacturing giant General Motors has made a final decision to launch production operations in Armenia–a senior company executive said on Tuesday.

Levon Hayrapetian–chief of GM’s Russia division–told government officials and foreign businessmen in Yerevan that the GM management has "come to a positive conclusion" about opening an assembly plant in Armenia and has already found buyers for its production.

Hayrapetian and other GM executives visiting Armenia earlier said if opened–the plant would assemble minibuses–small tractors and trucks to sell them mainly in Russia and other ex-Soviet republics.

"We plan it for export. We have big customers and have already signed [supply] contracts," Hayrapetian said. One such deal has been sealed with Russia’s Gazprom monopoly–he told a business conference in Yerevan–organized by the government. The three-day conference is also attended by representatives of several Western companies involved in the car industry.

Hayrapetian said the Armenian government has pledged to grant the future GM enterprise a "special privileged regime," which would exempt it from corporate tax for "three to five years."

The company has estimated that assembling cars in Armenia would be 30 percent cheaper than in the US–he said adding that high transportation costs to and from Armenia could require an on-site manufacturing of some parts.

It remains to be seen what the annual production level of the plant will be. Movses Zavarian–deputy minister of industry and trade–said GM will submit its final business plan "in the coming days." But it is already known that venture will not be a "giant," he told RFE/RL.

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