Opel looks east

US carmaker GM has decided to allow Opel to sell its cars in China, a move expected to lead to even greater competition among its brands in the huge Chinese market.

"We will market Opel as a European designed car in the premium segment," company spokesman Andreas Kroemer told Deutsche Welle. "There are a growing number of Chinese who like European cars and have the money to afford them."

Opel tested the waters in China last year, selling around 4,000 cars, according to Kroemer.

In the first half of 2010, China passed the United States as GM's biggest national market.

Together with Chevy and Buick

Kroemer declined to say which models Opel plans to sell in China. Currently, GM markets its Cadillac, Chevrolet and Buick brands in the country, in addition to vehicles manufactured by Wuling, a Chinese carmaker in which the US auto giant has a 30 percent stake.

Until now, vehicles made by Opel were only sold outside Europe under GM's Buick nameplate.

In addition to China, Opel will begin selling vehicles in Australia and later in several other markets in the Asia-Pacific and South American regions, according to Kroemer.

"This is great news for Opel and I believe the company has good opportunities in the country," said Christoph Stuermer, an auto analyst with IHS Global Insight in Frankfurt.

Export first, assemble locally later

Stuermer expects Opel will initially export cars to China until it establishes a market position in the country. But eventually, he said, the company will need to assemble cars locally to avoid import taxes, which can increase the price of vehicles by as much as 20 percent.

Opel will compete with Germany's other big carmakers, BMW, Daimler and Volkswagen, which have been operating in China for some time.

China has become the world's biggest auto market based on the number of new vehicles sold. Automakers around the world are looking to the country to drive revenue amid weak global demand.

But growth has dropped since last year when the government boosted demand with tax cuts and subsidies.

In recent months, Chinese auto sales have declined steadily, falling from 19.4 percent in June to 17.2 percent in July, according to the China Automotive Technology and Research Center.

Author: John Blau
Editor: Martin Kuebler