Beijing Auto plans to build Opel factory in China

Shanghai, July 7 (Gasgoo.com) In a detailed bid it submitted last week for GM's Opel, Beijing Auto outlined a plan to spend $2 billion setting up Opel's first factory in China, the Financial Times reported. The factory would start operating in 2012.

Beijing Auto plans to build Opel models specifically for the Chinese market. Meanwhile, the Chinese automaker will use Opel's German plants to export cars to China and proposes to shut down GM's Belgian Antwerp plant and cut Opel's European workforce.

Beijing Auto has offered €660 million ($920 mln) for cash-strapped Opel. The Chinese carmaker's bid is conditional on €2.64 billion in state guarantees and it proposes to let GM keep 49% of Opel's shares, much more than the other suitors.

Beijing Auto's chances hinge on a failure of GM's negotiations with Magna, who is the preferred bidder and has the backing of large parts of the German government and regional politicians. GM-Magna talks may be finalized this month.

The proposal to build an Opel plant in China could put Beijing Auto on a collision course with GM. The U.S. carmaker, which could exit from bankruptcy this week, is wary of a new competitor in one of its most important growth markets.