"This change in our business model in Russia is part of our global strategy to ensure long-term sustainability in markets where we operate," a statement by the company cited GM President Dan Ammann as saying.
The multinational automaker headquartered in Detroit said its St. Petersburg plant will halt operations by mid-2015. The company's spokeswoman later confirmed to RIA Novosti that plant workers will receive a compensation package following the closure.
"GM will focus on the premium segment of the Russian market with Cadillac and US-built iconic Chevrolet products such as the Corvette, Camaro and Tahoe," the company said.
GM added it expected to incur a $600-million loss in first quarter results over the scaling back of production in Russia.
Amman said the manufacturer's decision to scale back its low-cost product presence in Russia "avoids significant investment into a market that has very challenging long-term prospects."
