Autos

GM Restructuring: Opel Pulled From China, Buick Goes to Germany

Source: http://www.flickr.com/photos/jochen_images/

General Motors’ (NYSE:GM) European Opel division will begin producing Buick-branded vehicles destined for American showrooms at its plant in Ruesselsheim, Germany, Reuters reported on Friday. The idea is to tie Buick and Opel together so each shoulders a portion of the development costs and burdens, the company said.

It will also help GM focus on growing Buick sales in the U.S. and China, as well as growing Opel sales in Europe, which have stagnated in recent years. Opel already makes four versions of the Insignia sedan, Reuters reports, which shares much in common with the Buick Regal.

“Buick production in Ruesselsheim will further improve our capacity utilization,” Opel CEO Karl-Thomas Neumann said in a statement. ”It would have cost hundreds of millions of euros to raise awareness of the Opel brand and to expand the distribution network. Buick, however, is one of the market leaders in China and we plan to intensify our future collaboration, with several projects currently under examination.”

In China, the world’s largest auto market, Opel sold just 4,365 cars last year. Buick, on the other hand, sold 810,000 vehicles. General Motors is in the midst of pushing Opel through a large overhaul that will include 23 new products and 13 new engines. General Motors is sinking more than 4 billion euros into the revitalization; it will also be pulling the Opel brand form China entirely.

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“This is a long overdue decision,” Neumann said. “Buick, however, is one of the market leaders in China and we plan to intensify our future collaboration, with several projects currently under examination.”

“The decisions … are part of our extended growth strategy and are further evidence of GM’s confidence in Opel,” the Detroit Free Press quoted Wolfgang Schäfer-Klug, head of the Opel Works Council and deputy chairman of GM’s Opel Supervisory Board, as saying in a statement.

There have been whispers of cross-pollination between the brands, notably rumors that General Motors may bring a Buick-badged Opel Adam (pictured) to the U.S. Such rumors are so far unsubstantiated, but with its movements to intertwine the two brands, its very possible that the States might see some models previously relegated to the European markets.

Opel will also be investing 245 million euros (about $336.62 million) to build a new model at the Ruesselsheim factory; the company had said in December that it was planning on building a new car, but it declined to give any further specifics.