|
GM sets up shop in Russia
|
 |
November 29, 1996: 5:39 p.m. ET
Automaker set to begin production of Chevy Blazer outside Moscow
From Correspondent Jody Davis
|
NEW YORK (CNNfn) -- America's No. 1 automaker is hoping it will be able to crack the Iron Curtain.
General Motors recently announced it will begin producing the Chevrolet Blazer outside Moscow in December.
While the move will be the company's first foray into manufacturing there, GM has been selling cars in the Soviet Union for the past three years -- due in large part to an enterprising auto dealer from Queens, N.Y.
Harold Bendell, president of Major Automotive Group, has become a sort of one-man Russian trade office.
He saw business opportunities in the Soviet Union during a trip four years ago. He expected to see poverty and squalor, but instead saw a big opportunity.
"I was raised to believe that the Russians were this big bad bear and I found the complete opposite.," he said.
"There is a tremendous amount of opportunity here. I got the spark and just kept going with it," Bendell added.
A friend introduced him to Russians who wanted to see higher-quality cars and Bendell saw an opportunity.
He took his idea to General Motors who decided that between his product knowledge and Russian contacts, he was a natural candidate to become Russia's first GM distributor.
He now ships GM cars and trucks to six dealerships in five Russian cities.
Bendell said financing deals in a country some liken to the Wild West poses challenges.
"It's difficult to try and convince Western banks that you have control. When you say Russia, they go 'Oh wow! Criminals. We don't want our money over there.'"
While there are still obstacles to climb in trading with Russia, the idea is definitely catching on. Last year, slightly more than 1 million cars and trucks were sold in the former Soviet Union.
Bendell said he sold more than 1,000 new and used vehicles in Russia and the Ukraine over the same period.
He believes the market is emerging and he's not the only one. Erik Nielsen, emerging markets analyst at Goldman Sachs said there are many wealthy individuals who are eager to buy Western goods. (136K WAV) or (136K AIFF)
Despite traveling to Russia every couple of months, Bendell said he has not turned a profit on his venture.
Still, he's confident there is a future in trading with Russia. With analysts predicting higher demand there for cars and trucks, he believes he has the pole position in what could be a lucrative race for Russian buyers.
|
|
|
|
|
 |
|
