Opel freezes expansion plans in China

Opel freezes expansion plans in China

German carmaker Opel said on Friday it was halting its expansion plans in China, citing “the challenges facing the auto industry” as Berlin questions its commercial dependence on the Chinese market. Opel, which was acquired in 2017 by the PSA group, which has since merged with Fiat-Chrysler to form Stellantis, says it is “putting its entry into the Chinese market on hold for the time being.”

“Due to the current challenges in the automotive industry, it is more important than ever for Opel to focus on clear priorities – namely quality, economy, customer satisfaction and sustainability,” the manufacturer said in a statement. This suspension was also decided “taking into account the volume needed to make a real impact” in the Chinese market.

Diplomatic change

According to the business daily Handelsblatt, which revealed the decision, “the growing geopolitical tensions between the communist leaders in Beijing on the one hand and the United States and the European Union on the other hand” also played a role “nationalist tendencies in China, the draconian zero-Covid policy and the escalating conflict over Taiwan’s independence”.

The automotive industry is in a difficult phase between logistical difficulties, shortage of chips and rising prices. The government of social democrats Olaf Scholz, which is governing with environmentalists and liberals, is ready to take diplomatic, more decisive action with China, particularly in the case of human rights violations attributed to the Beijing government, and to reduce economic dependence on the Asian giant.

“The naivety is over”

China is Germany’s largest economic partner and an important market for many sectors, including the automotive industry. “We will introduce a more robust trade policy towards China (…), the naivety is over,” Economics Minister Robert Habeck promised at a meeting with G7 colleagues this week.

Opel, which has its cradle in Rüsselsheim in western Germany, emphasizes that it intends to continue its international development. The aim is to achieve more than ten percent of total sales in exports by the middle of the decade, according to the statement.

also readPSA and Fiat shut down GM after failed alliances

(with AFP)

Reference: www.challenges.fr

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