GM says will shut Russian plant, wind down Opel brand

(Adds details, GM President comment)

MOSCOW, March 18 (Reuters) - General Motors Co said on Wednesday it would idle its car plant in St. Petersburg and wind down its Opel brand, reducing its presence on the Russian mass market and resulting in around $600 million in special charges.

Car (HKSE: 0699.HK - news) sales in Russia have plunged, hit by an economic downturn following Western sanctions over Ukraine and a weak rouble. Car producers have been forced to find ways to cut costs yet attract consumers who are reluctant to make major purchases.

"This decision avoids significant investment into a market that has very challenging long-term prospects," GM President Dan Ammann said in a statement.

New (KOSDAQ: 160550.KQ - news) car sales in Russia fell 38 percent year-on-year in February in Russia, according to the Association of European Businesses.

The GM plant in Russia's second city of St. Petersburg will halt production by the middle of 2015, and GM (NYSE: GM - news) will also stop assembling Chevrolet vehicles at Russian vehicle factory GAZ this year.

The Opel brand will leave the market by December 2015 and the company will focus on the premium segment with Cadillac and some U.S.-built Chevrolet cars.

"We do not have the appropriate localisation level for important vehicles built in Russia and the market environment does not justify a major investment to further localise," Opel Group CEO Karl-Thomas Neumann said in the same statement.

GM said the charges would be recorded primarily in the first quarter of 2015, including sales incentives, dealer restructuring, contract cancellations and severance-related costs. (Reporting by Gleb Stolyarov and Maria Kiselyova, editing by Elizabeth Piper)