Opel, a German automaker, announced that it had abandoned plans to enter the Chinese market as Berlin officials take a tougher stance with Beijing on trade.
The decision to halt the expansion, which had been planned in July 2021, was made in response to “increasing geopolitical tensions” between the Chinese leadership and the United States and European Union, according to German business daily Handelsblatt, which broke the news first.
Opel in a statement had said that the company had to prioritise other matters due to “the current problems for the automotive sector.”
The availability of semiconductors has been a major barrier for the auto industry, which has forced manufacturers to halt production.
The carmaker said, “With this in mind, and considering the volume required to make a real impact, Opel has put its entry into the Chinese market on hold for the time being.”
According to Handelsblatt, China’s rigorous zero-COVID policy, which has resulted in rolling lockdowns, and the rise in hostilities around Taiwan had also made it “impossible” for Opel to join the important market.
German trade policy has also become more aggressive, with Economy Minister Robert Habeck stating that there would be no more “naivety” toward China.
The main reason for this shift in attitude among German officials is concern over violations of human rights.
Robert Habeck said, “The period when we said trade no matter what, whatever the social or humanitarian standards are, was over.”
Meanwhile, Luxury car maker Ferrari reported its record quarterly sales and profits recently. Thanks to the supercar sales boom in China and America, their net profit has witnessed good growth.
The company posts record profits after Lamborghini and Bentley. Ferrari said shipments rose 29% year-on-year to 3,455 units in the three months to the end of June.
Ferrari said sales were driven by the Portofino M and F8 family models, with total car deliveries to China, Taiwan and Hong Kong more than doubling from 166 to 358 year-on-year and up 62% to 1,053 in the United States.
Ferrari’s net orders hit a new high in the quarter indicating high demand, leading to a 22% rise in net profit to €251 million (£210 million), while revenues rose by a quarter to €1.3 billion.