In a series of moves announced Wednesday, but inevitable for much longer, General Motors Co. (NYSE: GM) said it will shut down its St. Petersburg, Russia, factory by mid-year and revamp its product offerings in the country. The company expects to take a charge of approximately $600 million in the first quarter of fiscal 2015 as a result of the changes.

GM said it will concentrate on the premium end of the Russian market with its Cadillac brand and the higher priced Chevy Corvette, Camaro and Tahoe brands. The company will “minimize” the Chevrolet brand itself and stop selling its Opel brand by the end of this year.

Economic sanctions, a collapsing currency and a crumbling crude oil market have led to a year-over-year drop in new car sales of 38%, and a forecast for drop in 2015 of 24% to a total of just 1.89 million vehicles.

GM’s share of the Russian market fell from 9.3% in 2013 to 7.6% in 2014. Annual sales of the company’s Chevy brand tumbled 28%, Opel sales fell nearly 23% and Cadillac sales dipped nearly 22% year-over-year.

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In the month of February, GM’s market share dropped from 9.3% a year ago to just 3.3%, and unit sales were down 78%. GM sold just 34 Cadillacs in Russia in the month of February.

GM President Dan Ammann had this comment in the announcement:

This change in our business model in Russia is part of our global strategy to ensure long-term sustainability in markets where we operate. This decision avoids significant investment into a market that has very challenging long-term prospects.

The head of GM’s Opel Group added:

We do not have the appropriate localization level for important vehicles built in Russia and the market environment does not justify a major investment to further localize. … We had to take decisive action in Russia to protect our business. We confirm our outlook to return the European business to profitability in 2016 and stick to our long-term goals …

The company’s goals in Europe are to raise market share to 8% of the total market and to reach a profit margin of 5% by 2022. That may sound like a pretty low bar, but look again at what is happening in Russia. Remember also that the St. Petersburg plant was supplying vehicles to all of Europe.

GM’s stock traded down about 0.7% shortly before noon on Wednesday, at $38.02 in a 52-week range of $28.82 to $38.60.

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