* Opel debuts three new models launching in China this year
* Opel sold 4,500 cars in China last year via 22 dealers
* Import tariffs, internal GM competition work against Opel
By Christiaan Hetzner
FRANKFURT, April 20 General Motors'
troubled Opel division is returning to China's main auto show
after a five-year absence, with three new cars at the centre of
a long-promised push into the word's largest market.
In Germany, where Opel employs around 20,000 workers, the
move may please unions and politicians anxious to preserve jobs
in an election year.
But analysts say it falls far short of earlier hopes for an
overseas sales revival for the European brand.
Opel badly needs to expand beyond Europe, where it is losing
money at an alarming rate - $1.8 billion last year - as it
struggles to cover the fixed costs of factories operating far
below capacity. The continent's auto market is at its smallest
in nearly 20 years and still shrinking.
But an already unambitious China strategy is likely to be
undermined by a tiny dealer body, painful import tariffs and
fierce competition from other GM brands.
Opel's new CEO, Karl-Thomas Neumann, appeared to emphasize
China's potential soon after taking office in March but the
former head of Volkswagen in China has since been conspicuously
quiet about his brand's goals in the market. GM has distanced
itself even from a modest 30,000-vehicle sales target advanced
by Neumann's predecessor last year.
"We do not provide details on volume targets," an Opel
GM's plans to develop Opel in China now amount to little
more than "lip service" to the brand's potential, said
Edmunds.com analyst Michelle Krebs.
"One of Opel's problems is that it isn't sold globally, so
the brand is dependent on shrinking European demand," she said.
"But they're only dipping their toes in the Chinese market."
Neumann himself appears to have scaled back his China
"To become a big brand (in China) we would have to invest
hundreds of millions of euros," he told Germany's Bild tabloid
in a recent interview. "We have other priorities."
At the Shanghai auto show, Opel is debuting three cars set
go on sale in China this year: its flagship Insignia ST wagon,
Astra GTC coupe and Zafira Tourer minivan.
However, it faces competition even from its own models, with
the Astra hatchback and sedan already made in China by GM as the
Buick Excelle XT and GT, and the Insignia rebadged by GM's U.S.
brand as the Regal.
POLITICAL BONUS POINTS
Import tariffs also add a formidable hurdle for all
carmakers, increasing the sticker price of an Opel built in
Europe by about 25 percent.
Opel sold through its 22 Chinese showrooms only 4,500 cars
during all 2012 - half of the mostly locally-built cars GM sold
on average each day in China during the first quarter.
Rival Volkswagen Group imported just 6.2 percent
of its first-quarter Chinese car sales, or 48,000 vehicles, and
manufactured the rest inside the country.
"This (return to the Chinese stage) won't do anything for
profits, but it's a start at least, said Metzler Bank analyst
Juergen Pieper, when asked about Opel's return to the Shanghai
"Chinese car buyers are known to favour German brands so
there is a chance that it could take advantage of that to grow
over the next year or so."
Company executives recently approved the first closure of a
German car plant in decades, giving possible ammunition to the
union-friendly Social Democrats in their bid to unseat popular
Chancellor Angela Merkel in September's general elections.
Labour leaders and politicians are now publicly pressuring
GM management to seek out export opportunities to compensate for
the moribund European market.
China certainly has more potential than most of the other
markets that Opel has entered in the past 24 months, such as
Chile, Singapore, Israel and the United Arab Emirates.
"Opel remains a political issue in Germany so this is also a
message directed at its audience back home, but in the end Buick
clearly has priority in China for GM," Pieper said.