GM Halts Car Delivery In Russia On Weak Ruble

(RTTNews) - General Motors (GM) on Thursday said it has halted the delivery of cars to dealerships in Russia as it strives to overcome the business risks stemming from the collapse of the ruble.

In a statement, GM's European division Opel said, "In view of the volatility of ruble exchange rate and with the aim to manage its business risk, GM Russia has decided to temporarily suspend wholesaling of vehicles to its dealers in Russia as of December 16."

GM said that cars already purchased by customers would be delivered at the agreed price.

The Russian ruble has lost 40 percent of its value since June, and the economy is under severe pressure owing to stiff U.S. and European sanctions over the Ukrainian crisis, and the plunge in price of oil, which accounts for a chunk of Russian revenues.

GM is not alone in halting Russian sales. Recently, Jaguar Land Rover temporarily stopped selling cars in Russia, on similar grounds.

The falling ruble has led to Russian consumers buying more of foreign vehicles, anticipating an increase in their prices. But increased demand, while appearing as a boon for automakers such as GM, only dented profit as the weak ruble hurt margins.

Another automaker, Audi, has also halted sales in Russia, but said it would resume sales after it sets a new price list.

GM is trading at $31.39, up $0.24 or 0.77%, on a volume of 5.2 million shares on the NYSE.