Sunday, October 2, 2022

Geopolitical tensions: Opal halts China’s expansion

Russellsheim-based conglomerate Opel has canceled its entry into the Chinese car market. Its background is said to be increasing economic and political tension with China.

Exactly a year ago, German carmaker Opel announced that it would enter the Chinese market. The group has put these plans on hold for the time being. Given the current challenges for the automotive industry, it is more important than ever for Opel to focus on clear priorities, the company said today.

“Against this background and given the volume required to make a real impact, Opel is currently holding off on plans to enter the Chinese market,” it said. However, the Rüsselsheim carmaker, which belongs to the Italian-American Stellantis group, is still preparing to enter new markets that promise good profitability even with smaller volumes.

Electric cars only from 2028

The carmaker announced in July last year that it would offer electric cars only in Europe from 2028. With the offer, the traditional brand also wanted to enter the car market in China. Currently, the sales of electric cars in the People’s Republic are growing strongly.

As “Handelsblatt” reports, the head of parent company Stelantis, Carlos Tavares, pulled Ripcord due to political concerns. Opel is one of 14 brands under the Stelantis umbrella. Stelantis also owns the Fiat, Peugeot and Alfa Romeo brands.

geopolitical tension

The background of the decision is growing geopolitical tensions between the communist leadership in China on the one hand and the United States and the European Union on the other.

Nationalist tendencies in China, a rigid zero-Covid policy and the escalation of the struggle over independence from Taiwan made it difficult for Opel to enter the world’s largest sales sector, the newspaper reported, citing business circles. In addition, Opel currently lacks attractive models that stand out from the competition to truly succeed in China.

important sales market

China is the most important market for German car makers. About 40 percent of all Volkswagen cars are sold in China, with BMW and Mercedes selling well over one in three cars there. At the same time, automotive groups are under increasing pressure to diversify their sales markets – thanks to Beijing’s increasingly protectionist attitude.

Federal Economics Minister Robert Habeck (Greens) said this week that Germany would have to look for new trading partners and territories. If the Chinese market shuts down, Germany will have extreme sales problems. According to Hebek, the innocence towards China is over.

On the other hand, the data presented this week by the research organization Rhodium Group point in a different direction. A third of all European investments in the period 2018 to 2021 were made by the three German carmakers Volkswagen, BMW, Daimler and chemical giant BASF.

Nation World News Desk
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