BAIC Would Build Opel Plant in China, Close Belgium Factory

Even though Beijing Automotive Industry Corp. (BAIC) submitted a takeover proposal to Opel only a few days ago, the first rumors talking about the company's plans over the German brand are already surfacing. The Financial Times today wrote BAIC plans to build an Opel factory in China, close the one in Belgium and cut the European workforce. Sources close to the matter told the aforementioned source said the first Opels built in China could roll off the assembly lines in 2012.

Chinese-built Opels would be especially targeting local buyers and, because the company is forecasting a huge demand in the domestic market, it also intends to use Opel's German plants to export cars to China.

BAIC is targeting a 51 percent stake in Opel, with the remaining 49 percent to be owned by General Motors. Magna International, who is currently seen as favorite to takeover the German brand, is eyeing a 55 percent stake together with its Russian partner Sberbank, while the remaining share would be split between General Motors (35 percent) and its employees (10 percent).

BAIC also mentioned it would need around 2.64 billion euro from the German state while Magna International previously requested 4.5 billion euro.

While commenting on the takeover proposal submitted by BAIC, General Motors representatives told the Wall Street Journal that China's bid for Opel is quite impressive. GM's officials were apparently surprised by the professionalism shown by BAIC as they made a well-prepared and detailed offer for buying the German brand.

BAIC is now favorite to buy Opel in case negotiations with Magna International fail to complete and, according to recent reports, this is quite a likely scenario.