Germany’s Opel Scratches Out China Expansion Plans

Germany’s Opel Scratches Out China Expansion Plans

German automotive manufacturer Opel has halted its planned expansion into China amid geopolitical tensions between Beijing and the United States and the EU. The company has confirmed the decision, citing current challenges concerning the automotive industry.

In addition to geopolitical tensions between China and the West, Beijing’s strict zero Covid policy is making entry into the already competitive Chinese market even more difficult.

Opel has also been struggling to find attractive models to differentiate it from local competitors in the Chinese market. Most foreign automakers have been sharing that challenge, particularly in China’s booming electric vehicle (EV) market.

Auto demand in China has been hit by power restrictions and extensive lockdowns in major cities. Volvo, Toyota and Volkswagen have either suspended production or put their factories into closed-loop systems, which still impacts output.

Meanwhile, European investment in China has become increasingly concentrated as a handful of large companies doubling down on their bets, whereas newer firms shy away from growing risks.

“In these circumstances and in light of the volumes required to make a real impact, Opel is putting its plans for entering China’s market to rest,” Opel said.

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