Opel will build Buicks in Germany for U.S.

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FRANKFURT -- General Motors' Opel unit said today it will build a Buick model for the United States at its plant in Ruesselsheim, Germany.

Opel said production would begin in the second half of the decade without naming the model. Opel currently produces the Insignia mid-sized sedan, which shares the same underpinnings as the Buick Regal, at the Ruesselsheim factory near Frankfurt.

Opel also said it will stop exporting vehicles to China in January 2015.

Opel will invest 245 million euros ($336.62 million) to build a new model in Ruesselsheim, the company also said today. It will annouce details of the model before the end of the year.

"With the investment in a new, additional model for Ruesselsheim, we will take another important step in our multi-billion dollar model offensive with which we will pave the way for Opel’s profitable growth," GM President and Opel Supervisory Board Chairman Dan Ammann said in a statement.

Opel said its supervisory board had also given the go ahead for future production of an additional variant of the Insignia. In 2015, it will also add output of the Zafira Tourer minivan at Ruesselsheim.

Building Buicks in Germany will help to improve capacity utilization as GM seeks to end losses at its European operations.

GM is hoping to strengthen both brands by more closely aligning their products, a strategy that could shave development costs and time, and increase their respective product offerings in major global markets, GM executives said in interviews at the 2013 Frankfurt auto show.

Supplier sources said the next-generation Adam minicar, due in late 2018, is being designed and engineered for sale in the United States and possibly in China.

Former GM CEO Dan CEO Dan Akerson said last year that GM is aligning its product development teams much more closely and that would mean more synergies between Opel and Buick.

China costs

The company said it had decided to stop plans to expand in China because such a step would cost a triple-digit million amount. Opel sold only 4,365 cars in China last year, compared with Buick, which sold 810,000 cars.

"This is a long overdue decision," Opel CEO Karl-Thomas Neumann said in the statement. "It would have cost hundreds of millions of euros to raise awareness of the Opel brand [in China] and to expand the distribution network."

The move builds on GM's global reorganization of its brands worldwide. In December, GM said it would pull its Chevrolet brand out of Europe and that its Holden unit would stop manufacturing cars in Australia.

Reuters and Bloomberg contributed to this report

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