BERLIN (Reuters) -German carmaker Opel has stopped a planned expansion into China amid geopolitical tensions between Beijing on one side and the United States and European Union on the other, the Handelsblatt daily reported on Friday, citing sources.
A company spokesperson confirmed the decision to Handelsblatt, citing current challenges in the auto sector.
In addition to geopolitical tensions, China's strict zero-Covid policies are making entry into the already competitive market even more difficult, Handelsblatt reported.
The carmaker was also lacking in attractive models to set it apart from local manufacturers, the report said - a challenge shared across foreign automakers battling to make inroads, particularly in China's electric vehicle landscape.
Auto demand in China has been hit by power restrictions and extensive lockdowns in major cities, with Volvo, Toyota and Volkswagen either suspending production or putting their factories into closed-loop systems, which generally still impacts output.
European investment in China is growing more concentrated, with a handful of large firms doubling down on their bets while newer players shy away from growing risks, a recent report by research organization Rhodium Group showed.
"In these circumstances and in light of the volumes required to make a real impact, Opel is putting its plans for entering China's market to rest," the company said to Handelsblatt.
(Writing by Matthias Williams, Victoria WalderseeEditing by Miranda Murray)