General Motors Company (NYSE:GM) decided to go ahead and cut its losses with Opel in China. General Motors announced today, March 28th, that it is halting sales of the German-based Opel brand in China. The decision to withdraw the venerable European auto brand from the Chinese market is newsworthy, but not market-moving, as Opel sales accounted for less than 5,000 of the 3.16 million vehicles General Motors sold in China in 2013.
Statement from General Motors
“This is a long overdue decision,” Opel CEO Karl-Thomas Neumann said in a statement. “Buick, however, is one of the market leaders in China and we plan to intensify our future collaboration, with several projects currently under examination.”
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The statement also said General Motors Company (NYSE:GM) considered but decided against undertaking an expensive marketing campaign to build awareness of Opel in China.
New Opel/Buick model to be built in Germany
General Motors Company (NYSE:GM) released a separate statement today announcing that it was planning production of a new Opel/Buick model in the company’s Ruesselsheim, Germany plant. Production of the new model was anticipated to begin in 2016, and a significant number are earmarked for export to the U.S.
The company did not provide any details regarding the planned new vehicle, which will be sold an Opel in Europe and re-branded as a Buick for sale in U.S., according to the press release.
General Motors Company (NYSE:GM) will spend $336 million to upgrade the Ruesselsheim facility for this and another new model to be in production in second half of the decade. The German auto works already produces four Opel Insignia models and the Zafira Tourer.
“The decisions … are part of our extended growth strategy and are further evidence of General Motors’ confidence in Opel,” explained Wolfgang Schäfer-Klug, head of the Opel Works Council and deputy chairman of General Motors’ Opel Supervisory Board, in an interview after the announcement.
General Motors Company (NYSE:GM) is trading up 20 cents at $34.71 as of 2:14 p.m. ET today.