MOSCOW, 28 August 2003 — General Motors Corp. said yesterday it would start to assemble its Hummer H2 sports utility vehicle in Russia to target the country’s growing band of businessmen with money to burn and a desire to impress. GM signed a framework agreement with Russian automaker Avtotor at Moscow’s annual motor show to produce two to four hundred of the huge cars, which are based on the military Humvee, and hopes to begin selling them in November.

The vehicles will be made at Avtotor’s plant in Kaliningrad, a Russian enclave in the Baltic region. The Hummer H2 weighs almost 3,000 kilograms, has a six-liter engine and fuel consumption of just 20 liters per 100 kilometers. It falls outside US regulations on fuel economy and has drawn the ire of environmental activists.

“We expect our customers to be achievers who want to show off their success and follow the fashion set by Hollywood actors, or successful people who hunt and need to travel across difficult terrain,” GM’s Regional Marketing Manager Pawel Widel told Reuters. “It will be a very unique car in Russia and Arnold Schwarzenneger is its icon, so it’s a very strong and masculine image,” he added. Tough-guy actor Schwarzenegger drove a Hummer H1, the predecessor of the current model.

Widel said that the car sells for between $50,000 and $60,000 in the United States but Avtotor Chairman Vladimir Shcherbakov said the Hummer H2 would sell for $85,000 to $110,000 in Russia. “It’s a niche product, so realistically 400 is the maximum we can hope to sell in a year. We don’t have plans to produce thousands of them,” he said, adding that the market for all luxury SUVs in Russia was only around 10,000 per year.

Avtotor already assembles KIAs and BMWs at the Kaliningrad plant. All parts for the new model will be imported from the United States.

Shcherbakov said the company would invest another $70 million in the plant on top on $200 million already plowed in. GM would not give any figures, saying the agreement was at a framework stage and that many details still needed to be ironed out. GM already makes cheap off-road Chevrolet Nivas at a $322 million joint venture with AvtoVAZ in the Volga town of Togliatti, and AvtoVAZ has said the plant will soon start production of Opel Astras there too.

Meanwhile, the booming Moscow stock market’s capitalization has shot up by 50 percent in the past six months to reach $168 billion, more than most emerging markets and those in some Western countries, a top official said yesterday. The combined value of shares on the Moscow stock market, which totaled $110 billion on Jan. 31, has now overtaken the value of the Finnish stock market, which stands at $140 billion, Igor Kostikov, chairman of the Federal Securities Commission, said in an interview posted on the body’s website. “We are advancing rapidly,” he said, adding that the market capitalization of the Moscow stock exchange was now equivalent to nearly 45 percent of the Russian gross domestic product (GDP) forecast in the 2003 budget.