Opel said it will continue to seek new markets outside Europe despite pulling out of Australia a year after launching sales in the country.
Opel said it will wind down its sales network in Australia "immediately."
The General Motors Co. unit said tough competition and the high cost of building brand awareness were the reasons it will end sales in the market.
Opel started selling the Corsa subcompact, Astra compact and Insignia mid-sized cars in Australia last August.
An Opel spokesman said the brand couldn't keep pace with discounts made by rivals.
"Opel Australia would need to follow recent competitor price reductions, and significantly reposition the price of its core volume models," the spokesman told Automotive News Europe.
Combined with the marketing investment, cutting car prices further was "not financially viable for any of the parties involved," he said.
GM's Australia-based Holden brand could sell rebranded Opels in the future, the spokesman said.
Opel will continue with its export strategy and "we are looking into new markets wherever it makes business sense for us," the spokesman said. He said Opel's launch in Israel had been a success and the brand expects to sell 5,000 cars in the country this year after beginning operations in spring 2011.
Opel aims to boost its vehicle sales outside Europe in a bid to reduce excess factory capacity and cut losses incurred by shrinking European sales. GM's European operations, which comprise Opel and UK sister brand Vauxhall, have lost $18 billion (13.6 billion euros) since 1999, including $1.8 billion last year.
In 2010, the brand created the post of executive director of international operations to grow new business outside Europe, with target markets including China, South America, Australia and South Africa.