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Opel prepares to leave Chinese market, negotiations with its dealership network continue


Gasgoo.com Ever since announcing that it will be leaving the Chinese market in the end of March, Opel and six of its 21 certified dealerships in the country have been negotiating how to implement a suitable subsidy policy to cover the dealerships' losses. According to reports, the subsidies the dealerships have been receiving from Opel are only a few 10,000 RMB, much to their displeasure. What worries dealerships even more is that the agreements with Opel are signed on a yearly basis, meaning that if Opel terminates the agreement at the end of the year, the dealerships will be left without even the meager subsidies they are currently receiving.

A representative from a Opel dealership explained: "As far as I know, ever since its announcement that it would be leaving the Chinese market until now, Opel has been negotiating with six of its certified dealerships on a subsidy policy." The representative added that Opel has been very stubborn on the issue, giving dealerships only a very minor amount.

In late March, Opel posted an announcement on its official website. In the announcement, Opel stated that due to strategic considerations, it had decided to gradually to shrink its Chinese sales network until completely halting all new sales operations in the country by January 2015. Opel, which entered the Chinese market in 1993 and has built a solid reputation, stated that it will continue to provide auto parts, maintenance and quality protection for its Chinese owners.

Opel's abrupt decision to leave the country left many in the industry surprised. In order to safeguard their interests, Opel-certified dealerships banded together to negotiate with the manufacturer. After several rounds of negotiations, Opel agreed to offer subsidies for the dealerships. However, the dealerships have not agreed to the amount Opel is offering.

In a letter addressed to Opel dealerships that was later quoted by Beijing Business Today, Opel outlined the subsidy policies in detail. According to the letter, Opel's subsidies will be determined according to each dealership's monthly retail sales, and will last until the end of this year. Furthermore, GM China will supply additional funding of 2,000 RMB for each vehicle sold, which will also last until the end of this year.

According to other reports, the dealerships only have until the end of the month to open negotiate with Opel. However, 15 of the certified dealerships have yet to negotiate with the manufacturer.




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