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China cannot accommodate "Opel"

Publish Date: 2022.09.20

Since the vigorous development of the new energy industry has enabled China's automobile industry to stand on the world stage in just a few years, the attitude of the Chinese automobile market towards foreign brands has changed from the past love to the current distance.

In addition to stabilizing the inherent market share, mainstream auto enterprises such as Volkswagen and Toyota are increasingly ignored by Chinese enterprises in terms of the speed of self transformation and insight into consumption trends; The departure and silence of Jeep, Acura, Infiniti and other brands have become the result of China's choice between the past and the future


Too many industry changes tell us that "China" is not easy to mix. Sharpen your head and try to rebirth in this market with the remaining arrogance. The only thing you can get is chicken feathers. A typical example is the so-called French high definition DS car.

Now, perhaps we have seen clearly the unprofitable side of China's car market. Opel, which said it would enter China before, finally wants to make a decision on this matter in order not to repeat the mistakes.

According to foreign media reports, with Stellantis Group's decision to implement the strategic policy of "light asset" operation in the Chinese market and considering the actual results in the future, the spokesman of Opel Automobile said, "The brand has temporarily shelved its plan to enter the Chinese market."

Next, no matter whether the move will be officially confirmed by the Group or its Chinese partners, regarding the current situation of Opel and the complexity of the Chinese market, I think Stellantis Group still has the brains to judge the gains and losses in the face of such self loathing things as Opel's entry into China.


Plans can't keep up with changes

What kind of brand is Opel?

In the era of the overall rise of independent brands, this question is far more difficult to answer than imagined. When Subaru, Alfa Romeo and other brands are still sold through import channels, it is difficult for more Chinese consumers to have a good impression. It is impractical to dig out the memory of consumers of declining car companies such as Opel that have long been delisted.

As a German car brand, Opel once filled the gap in China's entry-level imported car market with its unique brand tone. The result of annual sales of tens of thousands of vehicles, in the context of a hundred flowers in bloom at that time, was also the level of prosperity. But the good times don't last long. It is precisely this muddling mentality that makes Opel quickly taste the taste of being stabbed by the market.

Especially after SAIC GM's brands also launched new cars such as Buick Regal, Yinglang and Chevrolet Copac on the Epsilon II, Delt II and Theta platforms, Opel, which is characterized by serious homogenization of models and high prices, completely disappeared from the market. Opel could not survive without the blessing of Andra and Yate, relying on marginal goods such as Merena and Saifei.


On January 1, 2015, Opel was sent back to Europe by General Motors. Since then, China has not retained this seemingly foreign brand with a little personality.

It was not until 2017 that everything changed. At that time, PSA Group acquired Opel Motors (including Vauxhall in the UK) from General Motors at a price of 2.2 billion euros, and when it turned its losses into profits the next year, it was related to the plan of returning Opel to China, which was synchronous.

"Expanding the sales scope of Opel to places outside Europe means that Opel cars may be put into production in PSA's Chinese factories, or even enter the North American market." With such a vision, no matter whether Opel can enter China smoothly or not, with the determination of PSA, Opel's global expansion path at least shows signs.

Then, with the reorganization of PSA and FCA into Stellantis Group, the benefits brought by resource sharing would seem unreasonable to say that Opel was unable to enter the Chinese market again at this time.


Based on this background, for a time, the news of Opel's entry into China was frequently transmitted from all dimensions.

On the one hand, Gregoire Olivier, then the global executive director and chief operating officer of Stellantis Group in China, said, "Dongfeng Group is closely discussing with PSA to introduce the Opel brand into DPCA. After the introduction of Opel, it will not only expand the group's new energy product series, but also bring new growth to the whole group."

On the other hand, it can be seen from the decision of Opel's plan to "provide electric models in all its models from 2024, and complete its own electric transformation before 2028". In order to select a brand from Stellantis Group that can adapt to the pace of China's electric development, Opel is indeed the most suitable one.

So why stop Opel from entering China at this juncture?


I believe everyone has seen the iterative speed of China's new energy industry. Volkswagen, BMW and Mercedes Benz, both European car companies, have failed to take advantage of the encirclement and suppression of new car making forces and the awakening of traditional Chinese car companies under their extraordinary operations in the past two years. So, even if you come to China with enthusiasm, I believe that the electric vehicles with no obvious advantages from Opel are really useless.

As for the Chinese business of Stellantis Group, it is not only that Opel has no hope of entering China. From its increasingly disdainful attitude to the Chinese market to the survival status of the existing joint ventures in China, whether Stellantis Group can make good use of the short spring of Peugeot and Citroen to complete its self salvation has become a problem.

Stellantis doesn't need China

It is well known that, except for DS, which lives on by leveraging Libaoneng, the local business of the entire Stellantis Group in China is only dependent on DPCA.

On July 18 of this year, due to the lack of progress in the plan of majority shares of GAC Fick, a joint venture with GAC Group, Stellantis Group announced that it would develop the Jeep brand in China by means of asset light and negotiate with GAC Group to terminate the local joint venture. In the future, the Group will only focus on the distribution of imported Jeep cars in China.


In short, according to the current development of China's car market, Stellantis Group will not play or turn around.

Opel did not consider entering China because the Chinese car market is too involved. But in my opinion, the reason is more that Stellantis Group is afraid of the sequela of Jeep brand's failure in China. The experience of "beating water with a bamboo basket" is enough once. Once again, there is no need.

Looking back at the first half of 2022, Stellantis Group's performance may not be as unsatisfactory as we expected. Data such as the net revenue of 88 billion euros, the net profit of 8 billion euros, and the adjusted operating profit margin of 14.1% prove that Stellantis Group is still rich in its small days, supported by the European and American markets.

However, for Stellantis Group, short-term profits do not seem to be enough to make it continue to be capricious. Instead of continuing to introduce new domestic brands in the Chinese market, it fell into the strange circle of heavy asset management. It is obviously more in line with the Group's survival logic of "greater interests" that Opel's entry into China should be postponed after careful consideration.


In the "Dare Forward 2030" strategy set in March this year, Stellantis Group had planned the development trend of its 14 brands, and "how to operate the Chinese market" was also put on the agenda.

To tell the truth, Stellantis Group sold a total of 24.6 new energy vehicles in the world in the first half of this year, including 136000 pure electric vehicles, an increase of 46% year on year. For most people, "giving up the Chinese market" should not be a choice for a car group that has made modest achievements in the process of electrification.

However, the real dog blood still can not make Stellantis Group relieved. Relying on the new Peugeot Citroen model platform, Opel has produced new electric vehicles such as Corsa-e and Mokka-e. In the first half of the year, 32000 European consumers did pay for it.

But back in China, from Gregoire Olivier to Carlos Tavares, the group's CEO, China's nearly crazy pace of transformation in recent years will not make them unable to find out. No matter what Opel does, it is an uncompetitive brand in front of Chinese auto companies.


However, as the Group integrated China into the "China, India and Asia Pacific" market as a whole in its previous strategic planning, and set the revenue target of China in 2030 at around 6.7% of the Group's total revenue, people with strong perception have already understood that the importance of the Chinese car market in Stellantis Group's business landscape has rapidly declined.

Moreover, when GAC Fick is still cleaning up the trivia left behind by foreign withdrawal, Jeep brand backhanded released its own electric strategy overseas. It plans to launch four new pure electric vehicles in North America and Europe by 2025, and become a pure electric brand in Europe by 2030. Meanwhile, Jeep released three electric SUVs, namely Recon, Avenger and Wagoneer S.

Based on the previous series of operations of Stellantis Group, it is more clear that the Chinese market has been removed from its future business focus. If so, Opel still wants to enter China as planned and put into production in DPCA, do you think it is possible?

In Europe, Opel, which had taken refuge in Stellantis Group, erased the embarrassment of always being sucked by Buick and Chevrolet during the GM period. The determination to comprehensively transform the electrification has started to make Opel take on the role of the "vanguard" of the group focusing on the new energy market, but the Chinese market cannot accommodate Opel, so there is no reason..


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