The electric market in China is growing, but it would have been difficult for Opel to stand up to the competition.
(Photo: imago images/Sebastian Geisler)
German car manufacturers have grown enormously over the past 15 years. The main reason for this was the steadily growing enthusiasm of Chinese customers for vehicles from Volkswagen, Mercedes-Benz and BMW. The trio now sells well over a third of its global sales in China.
Only Opel, as the only domestic car brand with a long tradition, never really managed to gain a foothold in the People’s Republic. When the company with the lightning bolt logo announced more than a year ago that it would be expanding into China again in the future, the managers in Rüsselsheim hoped for a liberation. Get out of Europe, finally grow instead of further shrinking.
But that was always wishful thinking. The fact that Opel is now meekly calling off its planned China offensive is more a blessing than a curse for the company. Geopolitical distortions save the Hessians from making a serious mistake. The risks in China, with its burgeoning nationalism, have been increasing for years.
In addition, the market has not been growing unchecked for a long time. In fact, more than 120 brands are jostling for the attention of a clientele that tends to be increasingly disloyal.
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National providers such as Wuling, BYD, Geely, Changan or Nio even steal the show from many Western vehicle manufacturers. When it comes to electric drives and clever digital technology, the Chinese are sometimes ahead of the Germans. At Opel, software expertise is particularly low. The vehicles of the Hessians do not offer any other real unique selling points. It is surprising why people in Rüsselsheim believed they could still succeed in China.
Opel should have started from scratch
The “asset-light” strategy generally ordered by the parent company Stellantis for China is also unlikely to work. The idea of being able to generate lavish profits in the world’s largest car market without investing massively locally at the same time seems extremely naïve. The fact is: Opel would have to start from scratch in China.
The company was already present in the Far East from 1993 to the end of 2014 with around two dozen dealers. But in 2015, the Hessians withdrew completely from the country. The reason: Opel had never managed to deliver more than 5,000 vehicles per year in China. It probably wouldn’t have been any different with a restart. The market in China is divided. Nobody waits for Opel.
Opel should now invest the high expenses that would be required to set up a new sales structure in China elsewhere, for example in maintaining the plants in Europe. Compared to the competition, they’re pretty run down – and so hardly competitive anymore.
More: Opel cancels China expansion