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GM’s Rebuff of Beijing Auto Opel Bid May Come From China Threat

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July 24 (Bloomberg) -- Beijing Automotive Industry Holding Co., the fastest-growing carmaker in China, may have its success to blame for the failure to buy General Motors Corp.’s Opel unit.

“Beijing Auto is on the rise and GM has no interest in strengthening a rival in China,” said Zhu Xuedong, an analyst at Industrial Securities in Shanghai. “The center of gravity in the industry is shifting to China.”

Beijing Auto’s bid for Ruesselsheim, Germany-based Opel offered more cash and asked for less government aid than those of Magna International Inc. and RHJ International SA. Beijing Auto’s bid failed because it could not come to an agreement with General Motors over intellectual property rights to car designs and technology, Chairman Xu Heyi said today in Beijing.

“GM was worried that if they gave us the intellectual property rights, it will impact their position in China and hurt their relationships with existing partners,” Xu said.

China, where GM is the largest overseas automaker, is set to surpass the U.S. as the world’s largest auto market this year as government subsidies and tax cuts help companies avoid the worst of a global meltdown in vehicle sales.

Beijing Auto’s venture with Hyundai Motor Co. sold 257,003 vehicles in the first half, a 56 percent jump. In contrast, GM’s sales in the market rose 38 percent to 814,442 vehicles

The Chinese company’s venture with Daimler AG, the world’s second-largest luxury-car maker, broke even last year for the first time, helped by the country’s rising demand for premium sedans.

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I am glad GM had the foresight to stop this from happenning. I want to see GM stick with Opel, however possible.

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