Confidence levels have risen dramatically over the past 18 months

This week, ArtTactic released its newest Chinese contemporary art market confidence survey, which — as expected, considering the success of this spring’s auctions in Hong Kong and mainland China — shows a 27% positive increase in confidence over December 2009, with a majority of respondents believing either that the Chinese contemporary art market has rebounded or will do so within one year.

Over the past 18 months, the emergence of the mainland Chinese auction house as a strong regional force and the growing clout of new Chinese collectors has injected a serious dose of optimism into the market, and led ArtTactic to conclude that the current trend sets out the possibility that Chinese contemporary art volume in 2010 might even come close to pre-crisis historical levels.

Highlights of ArtTactic’s latest report:

- 71% of respondents believe the market has already rebounded (35%) or will do so within one year (36%). This is significantly higher than in December 2009, when only 22% of respondents said they thought the market would rebound within a year or earlier.

- The 27% positive increase in the Chinese contemporary art confidence indicator is driven by substantially better Hong Kong and mainland Chinese auction results in the first half of 2010, as well as pick-up in primary market activity.

Ai Weiwei tops ArtTactic's Artist Longevity Indicator ranking

- 53% of respondents believe the market will go up over the next 6 months, 39% belive it will level out, and 8% believe the market will fall.

- The Confidence Indicator (which now sits at 73) suggests that a significant amount of optimism has re-entered the Chinese art market, and the primary driver for the Chinese contemporary art market going forward will be economic growth.

- The lower end of the Chinese contemporary art market (works priced below US$50,000) has the highest market confidence, although the top end (works above $1 million) shows more positive than negative sentiment — reflected in the success of blue-chip artists in this year’s spring auctions.

- The speed of the recovery in the Chinese contemporary art market has accelerated in the first half of 2010.

- The strong growth in the domestic auction house volume suggests that market share is shifting away from Hong Kong towards the Mainland. Last year showed the strength of the domestic collector base and the ability of domestic auction houses to attract top quality consignments.

- Top 10 prices reveal the difference between domestic and international taste. Although there are overlaps with blue-chip artists like Liu Ye, Yue Minjun, Zhang Xiaogang and Liu Xiaodaong, mainland Chinese auction houses focus on Chinese contemporary oil paintings by artists like Guo Reunwen, Yang Feiyun and Shi Chong. Conceptual artists like Ai Weiwei, Zhang Huan and Cai Guo-Qiang who are popular at auction in Hong Kong are rarely seen in Mainland auctions.

Auction volume is rising quickly among mainland Chinese auction houses (Graph: ArtTactic)

- The Chinese contemporary art market currently consists of two parallel markets: one catering to domestic demand and the other catering to a predominantly international art market. In terms of growth, the domestic market is having the upper hand.

- Sell-through rates at Sotheby’s and Christie’s Hong Kong have risen significantly, approaching 80% and rising, over an autumn 2008 low of slightly more than 60%.

- The average Chinese contemporary artist confidence indicator stands at 60.1, up 14.4% from December 2009. A total of 84% of the contemporary artists in the survey have shown a positive increase in their short-term confidence levels.

- Zeng Fanzhi has moved from rank 18 to rank 2 on the artist confidence indicator, Cai Guo-Qiang has risen from rank 13 to rank 4, and Yang Fudong is in the top position for the second time in a row. Other artists in the top 10 include Zhang Huan, Xu Bing, and Ai Weiwei.

- In the long-term artist longevity indicator, Ai Weiwei shares the top spot with Cai Guo-Qiang, with no change in the artists rounding out the top 10, which include Yang Fudong, Zhang Huan, Xu Bing, Zeng Fanzhi and Gu Dexin.

Confidence levels are rising quickly in the Chinese art market

Comparisons to 2008 Survey

In ArtTactic’s February 2009 Chinese contemporary art confidence survey, which indicated the dramatic effect the global economic crisis had on the international art market, pessimists outweighed optimists some six to one, the market indicated a lack of confidence about top artists (although optimism remained somewhat high among Chinese contemporary mixed-media artists). Following 18 months in which Chinese collectors have become increasingly motivated and interest in art collecting among Chinese corporations and museums has grown, however, the change in confidence levels is rather striking.

Comparisons:

- Confidence Indicator: 15.9 (Feb. 2009) vs. 73 (Sep. 2010).

- The level of speculation in the Chinese contemporary art market, as of September 2010, is down 8.3% from February 2009.

- 72.7% of respondents had a negative view of the current- and short-term prospects for Chinese contemporary art (Feb. 2009) vs. 71% having a positive view in September 2010.

- Zeng Fanzhi’s confidence indicator has risen dramatically, from 56 in February 2009 to 86.7 in September 2010.

Jing Daily Conclusions

Looking at the upward trajectory in prices for top contemporary artists and taking the fact that prices are headed towards — but are not yet at — historical levels indicates that it’s still a good time to buy blue-chip Chinese contemporary artists, particularly those whose buyers overlap between domestic Chinese and international collectors. As works by these artists, especially Liu Ye, Zeng Fanzhi, Cai Guo-Qiang, Ai Weiwei and Yue Minjun, are increasingly snapped up by mainland Chinese collectors and sold by mainland Chinese auction houses, they’re likely to only get more expensive and harder to find in coming years.

The majority of respondents are optimistic in their current- to six-month outlook

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Previously on Jing Daily

ArtTactic’s Analysis Of Christie’s Spring Auctions In Hong Kong: Highlights

ArtTactic’s New Chinese Art Market Report: Highlights

Chefs Elena Arzak and Fina Puigdevall at the Spanish Pavilion

Jing Daily recently attended a brunch hosted by the Spanish Pavilion restaurant Acqua (previously), featuring Michelin Star chefs Elena Arzak and Fina Puigdevall. While they are certainly premier Spanish chefs, they are also two of the world’s top female chefs, with Elena Arzak being one of the few women to hold 3 Michelin stars for her restaurant Arzak.

Each brings to China new conceptual ideas, with Elena experimenting with Chinese elements and Fina reinterpreting traditional Spanish dishes using locally sourced ingredients. The event featured a brief presentation by the two chefs and a fusion-inspired menu, including red shrimp with fried vermicelli, mimosa eggs with tuna-oil hollandaise, potatoes in roasted vegetable juice, and a dessert of peach “yolks” in cinnamon soup.

As ambassadors for Spanish gastronomy, the two set a high bar and presented an innovative menu, impressing the 50 or so journalists and other guests present. The Chinese and international media has been singing high praises for the Spanish Pavilion’s star-studded gastronomic agenda, and 23 of the 49 combined Michelin stars that the Spanish Pavilion chefs can lay claim to are yet to come.

The Spaniards will continue to expose Shanghai to Spain’s culinary delights, including the highly anticipated Tapas week scheduled for the end of October.

About Elena Arzak and Fina Puigdevall

Michelin 3-star chef Elena comes from a cooking background, as the daughter of culinary master Juan Maria Arzak; she is a fourth-generation chef. Though experimental in her approach to cuisine, she was well-chosen for the Shanghai Expo, as she has a constantly evolving style and has a respect for the variety and flavors of Chinese cuisine. She cites The Heritage of Chinese Cooking by Elizabeth Chong as an inspiration, particularly for its Chinese broths, sauces, and vegetable preparations.

Fina is a Michelin 2-star chef and a Medal of Merit winner. Her restaurant, Mas Les Cols, is within a national park and is praised for its sustainability, using only local and seasonal foods. In addition to her restaurant, she also runs a small vineyard, because she feels wine is closely tied into the experience of food. Aside from Spanish cuisine, she also loves Japanese cuisine, and though it is the first visit to China for the two chefs, they both hope to bring something new to the culinary experiences of Shanghai.

Elena Arzak and Fina Puigdevall with Spanish pavilion director Maria Tena

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LA Lakers player Ron Artest is one of the 12 NBA players who currently endorse PEAK

Although names like Anta, Li Ning and PEAK don’t yet ring the same bells stateside as Nike, Adidas or Puma, over the past several months we’ve seen concerted efforts by these three homegrown Chinese sportswear brands to change that. Led by Li Ning — which opened its first U.S. retail location in Portland, Oregon this February, and recently signed a multimillion-dollar sponsorship deal with NBA rookie Evan Williams — Chinese sportswear brands that have seen great success at home but are virtually unheard-of overseas are making gradual advances towards the cut-throat American market.

Last week, Anta signed Kevin Garnett as its second NBA spokesman (following Houston’s Luis Scola), and now PEAK — which, despite its low name recognition, has already signed sponsorship deals with more than 10 NBA players (including Jason Kidd) — is looking to break into the American market. Recently, the company opened its first U.S. office in Los Angeles, with hopes of launching its first retail locations in 2011.

From Slam Online:

The LA office that the brand has set up is the first building block of establishing its US presence. The office’s function for the time being is first to facilitate the NBA players they’ve sponsored and second to begin working towards an American product launch in mainstream retail outlets for 2011.

“We’re just introducing ourselves and currently we’re taking care of the players here and providing them apparel and product that they can work out in. We just want to be equipped with product and we’re getting that figured out,” Su explains.

“Asian fit and American fit is very different, so … as well as preparing product for retail we’re getting samples back and making revisions and hopefully we’ll be ready to go.”

Like Douglas says, it’s more than shoe fit that the US extension of PEAK will have to adjust to. It’s also a totally different culture.

“When we get things in from PEAK China, they’re things that people would not wear here, so it’s totally different,” she says. “I think the biggest challenge is trying to completely redo what they’re doing over there and try to build a Peak US.”

It’s interesting to compare the American growth strategies of these Chinese sportswear makers to the European and Japanese brands who preceded them. While Japanese brands like Asics targeted the long-distance runner market (and the Asics-owned Onitsuka Tiger caught on with retro sneaker enthusiasts) and European brands like Adidas diversified their products across a wide range of sports, it appears that Chinese brands are placing all of their bets on the basketball shoe market. This immediately places them in direct competition with established, well-capitalized companies like Nike, which controls 93% of the American basketball shoe market.

While the choice to focus on the NBA is somewhat understandable — it is, after all, hugely popular not only in the U.S. but also in China — these brands are likely to pigeonhole themselves before they even have a chance to try other sporting markets. Although Li Ning is already trying to branch out into other areas, such as shoes and apparel designed with badminton in mind, without getting into the American football, baseball, and running markets, these brands might be limiting the scope of their brand-building potential in the American market before they really even get off the ground.

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Chow Tai Fook (周大福), the Hong Kong-based jewelry brand, recently unveiled its new “K-Gold National Essence Series“, which incorporates Western nuances and re-envisions Chinese design in the company’s trademark fashion. Combining K-gold — an 18-karat gold developed by the World Gold Council, the promotion of which Chow Tai Fook began in 2004 — with silver, the line derives inspiration from the Shanghai World Expo and the growing connection between China and the international community. According to Artxun:

The Shanghai Expo theme of “Better City, Better Life” has become the creative inspiration for [the line's] designer, who has cast the city’s changes throughout the ages into modern gold designs that seamlessly combine traditional Chinese culture and modern urban rhythm, perfectly reflecting and interpreting modern pop culture with Chinese characteristics.

Chow Tai Fook's "National Essence Series" (Image: Xinhua)

Chow Tai Fook's "National Essence Series" (Image: Xinhua)

Chow Tai Fook's "National Essence Series" (Image: Xinhua)

Chow Tai Fook's "National Essence Series" (Image: Xinhua)

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Some Chinese brands like Trands are hoping to break into the international mainstream without acquisitions

With the possible exception of the Warren Buffett-feted Trands, Shanghai Tang, and JNBY, which recently set up shop in New York’s Soho district, higher-end Chinese fashion brands are virtually unknown in the West and rarely celebrated at home. Though brands like NE-TIGER hope to change this by getting domestic shoppers to quit their foreign brand addiction and rediscover Chinese design, the odds are — at the moment — against them.

However, this week the Financial Times reports on a trend that Jing Daily has identified several times over the past year and a half, that of companies in emerging markets like China and India looking to leapfrog into the high-profit-margin luxury industry by acquiring well-known Western brands and taking advantage of lower labor costs, developed supply chains and distribution networks at home.

Much in the same manner that auto companies like Volvo and Land Rover were acquired by Chinese or Indian companies in recent years, in the wake of the global economic crisis dozens of pedigree apparel brands either went bust or put themselves up for sale at prices that many Chinese and Indian companies felt irresistible, with Mumbai-based SKNL purchasing HMX, the Chicago-based owner of suitmaker Hickey Freeman (a favorite of U.S. President Barack Obama) and Hong Kong-based Li & Fung taking over the British couturier Hardy Amies.

So is the “axis of fashion” really “tilting east”, as a CNN post suggests today? Or will formerly-Western-owned brands have trouble selling in their home countries under new management? From the FT:

From individual consumers of luxury goods, the Chinese and Indians have become consumers of luxury companies, in a shift that has far-reaching implications for the $80bn (€63bn, £52bn) a year industry. Many of the recent acquisitions have been driven by a wish to raise production standards in Asia and, in the long term, change a tenet of the luxury industry: the importance of production in “country of origin”. The notion that to merit its price tag, a luxury item must be made in the country where it is designed and where its label was born is on the wane.

Although the ready-to-wear shows, which start next week in New York and continue in London, Milan and Paris, are filled with labels that say not only Calvin Klein or Gianfranco Ferrè but also that they are “Made in Italy” or “Made in France”, the goal of many new owners is to change the second part of the equation to “Made in India” or “Made in China”.

The first stage in the transformation – transfer of ownership – has not only begun but, says Luca Solca, chief luxury analyst at Sanford Bernstein in Switzerland, “is a trend that is only going to gain momentum”.

…

Many Asian companies believe they have a comparative advantage in taking over apparel-centric luxury brands because they can shift production to lower-cost facilities closer to home and increase profit margins, while also using the magic of brand names and their existing distribution channels in the US or Europe to increase sales.

As the article goes on to point out, however, just acquiring a famous brand isn’t an end in itself. Chinese or Indian buyers need to have a clear understanding of where they want to steer their new prize, and need to recognize the challenges they’re likely to face both at home and overseas:

“Brands mean nothing unless you know what to do with them,” says the chief executive of one of the most successful US apparel chains. “Olds mobile used to be a prestigious brand,” he points out, referring to one of the General Motors marques that had value in the past but is no more.

…

While on paper many acquisitions look logical as well as emotionally compelling, execution can be hard work. Indian companies are, for example, used to surviving in an environment where capital has been expensive and interest rates high. That gives them a laser-like focus on return on their investment. But often they may not have the deep pockets to invest in the brands they acquire.

“Just as in the 1970s, [when] ‘Made in Japan’ had a negative taint,” says Mark Bandak at Blackstone Advisory Partners, part of the US private equity group, “today so does ‘Made in China’ or ‘Made in India’ – but they take great pride in their manufacturing capabilities and the question for them is how do you change that image? This is key at the moment.”

…

But as wealth swells in Asia, and American and European consumers tighten their belts, there is no doubt that fashion’s centre of gravity will increasingly shift east, in manufacturing as well as consumer terms. In the end, more and more companies will tackle the question posed by John Studzinski, head of Blackstone Advisory Partners: “Do you just buy the milk, or is it smarter to own the cow?”

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Now that summer is coming to an end, major auction houses are again gearing up for the upcoming autumn auction season. As Jing Daily covered extensively during the spring auction season, driven by the desire to diversify their holdings, as well as concerns about property values and inflation, we can expect new mainland Chinese collectors to dominate many auction segments in Hong Kong this fall. If spring was any indication, in the months ahead look for Chinese collectors enthusiastically bidding for fine wines, rare watches, Chinese contemporary art, traditional art and antiques from popular historical eras, and jewelry.

Yesterday, Sotheby’s held its Autumn Auction preview in Hong Kong, showcasing some of the nearly 400 lots of fine Chinese ceramics and works of art that will go under the hammer on October 7-8 at the Hong Kong Convention and Exhibition Center. Though these lots have an estimated value of HK$780 million (US$100 million), expect Chinese bidders to live up to their reputations and go well above high estimates for particularly attractive pieces.

Photos of the Sotheby’s Autumn Auction preview in Hong Kong, courtesy of Xinhua:

White Jade "Xintian Zhuren" Seal estimated at 25-30 million HK dollars (US$3.2-3.9 million)

White Jade "Xintian Zhuren" Seal

Enameled imperial vase with an estimated value of 60-80 million HKD (US$7.7-10.3 million)

Imperial enameled vase

Beijing enamel teapot with estimated value of US$2.6-3.9 million

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Many of China's super-rich, like investor Liu Yiqian, have become enthusiastic collectors of Chinese antiquities and contemporary art

With wealthy Chinese consumers becoming the darlings of the luxury industry, the auction market, the automotive industry and the art world, it’s no surprise that companies are bending over backwards to find out what drives the estimated 825,000 people worth over 10 million RMB (US$1.46 million) and 51,000 individuals worth over 100 million RMB (US$14.64) to make purchases.

As Jing Daily has noted before, for some things, like luxury cars, consumers in China have very specific needs, for which automakers have made adjustments (such as larger backseats) to localize the product. In terms of luxury products, major brands have had to become more conscious of the rapid increase in consumer sophistication and low brand loyalty, increasing the quality of products offered in the China market and understanding that Chinese consumers of a certain income level generally prefer to purchase luxury goods outside the mainland.

For these industries, looking into why wealthy individuals are spending so much money can often come down to their desire to set themselves apart — to “show off” — but there is also the perception that luxury goods also offer superior quality and, in some ways, have great investment value.

In other areas, like the auction market and its counterpart, the art world, Chinese consumer behavior is often more nuanced. In many ways, Chinese buying habits at auctions (particularly in Hong Kong) follow a cultural predilection towards long-term value and stability. Hence, although wealthy Chinese consumers have gotten something of a bad rap in the media over the past several years, often being depicted as frivolous nouveaux riches one and all, many wealthy Chinese have a very pragmatic way of looking at auction buying.

Much like gold and jewelry, which remain highly popular in China and have been a sort of traditional hedge against inflation there for centuries (despite occasional historical interruptions), art, fine wine, important watches and other auction prizes are seen by many in China as a great “portable hedge” that will hold or grow value in the face of inflation or gradual revaluation of the yuan.

As the Chinese currency is increasingly “going global,” and the country faces more pressure to loosen its tight grip on the yuan, it’s not a bad investment strategy. Perhaps that — along with the growing specter of inflation — is why we’ve seen such an upsurge in new mainland Chinese collectors fighting to get their hands on every piece of blue chip Chinese contemporary art, every ancient Chinese antiquity, and every bottle of Petrus or Lafite up for grabs in Hong Kong or elsewhere — because they’re worried about the future value of yuan-denominated investments and want to diversify their holdings.

Growing mainland collector interest in art collecting has increased buyer confidence over the past several years, despite the global economic crisis

Though most of China’s millionaires and billionaires still have their “permanent” investments — cars, apartments and commercial properties — a good number of them with keen long-term vision know that in a world of unpredictable currency or economic shifts, it’s not a bad idea to “go portable” to stay on the safe side. In terms of the art and auction worlds, the increasing number of mainland-based buyers of art, wine and other portable assets is interesting in other ways, too — they’re not just following trends anymore, they’re actively setting them.

As Chinese collectors become increasingly sophisticated and picky, we should see a sort of domino effect on the prices of certain artists (most of them likely Chinese, as the vast majority of mainland collectors have only just begun to dip their toes into collecting non-Chinese artists) or popular wines around the world.

Wealthy Chinese consumers, then, shouldn’t be misunderstood or misrepresented as fickle, profligate showoffs. Rather, it’s important to keep in mind that there are reasons why mainland Chinese tourists flood Parisian duty free shops (selection, avoiding China’s high luxury tax), why huge sedans are so popular in China (personal drivers popular among well-heeled businesspeople), and why new Chinese collectors have become so visible in the last few years (hedge against inflation and yuan revaluation, growing personal interest in the arts, desire to “repatriate” antiquities and China’s future cultural heritage).

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Taiwanese designers like Gioia Pan have been successful in the mainland China market in recent years

The Associated Press reports today that Taiwanese designers and fashion brands are set to break into mainland China in a big way as a result of the trade agreement recently signed between Taipei and Beijing, which will cut tariffs on apparel and other goods while better protecting intellectual property. In recent years, Taiwan’s fashion industry has looked to transition away from a mass production model and towards one that fosters innovation. With this trade deal, Taiwanese designers could potentially capitalize on China’s booming retail and high-end markets and gain a better foothold to better compete with their Japanese and Korean counterparts.

From the AP:

“Because of our shared culture, Taiwanese designers can cater to the needs of Chinese better than Westerners,” said Gioia Pan, one of the few Taiwanese designers with stores in China.

Pan mainly sells custom-made clothing to well-heeled Chinese consumers but believes the vast market across the Taiwan Strait offers something for everyone.

“There are more than a dozen levels of consumers in China,” she said. “Everything from casual wear to top-end products could sell well. Unlike the Taiwanese, many Chinese pick up the dresses they like and don’t wait for big discounts.”

She said the time may be opportune for a big China move by Taiwanese designers, because many Chinese designers are still studying in the West, and are three to five years from making an impact in their home market.

The view is echoed by Fang Tong, a saleswoman from Hongdu Group, one of the Chinese firms attending the Taipei Fashion Week.

“The Taiwanese designers may do well on the mainland,” Fang said. “Their clothes — priced much lower than the top Western designer houses — may fit the Chinese even better.”

Currently, fabrics account for the biggest export item of Taiwan’s textile industry, and many fabric makers are ramping up production with tariffs expected to drop from 17 percent to zero in two years.

A spokeswoman for Ho Yu Textile Company, who would only give her surname Cho, said the lowering of tariffs means it is now economic for the company to export fabrics to China. The company is supplying fabrics to luggage makers in China for exporting the finished goods to Europe and the U.S.

Among the highlights at the fashion week show was the vibrant knitwear and ready-to-wear dresses created by Taipei native Chia Wenlan, founder and designer of Twinkle by Wenlan in New York, and recipient of Tokyo’s prestigious Onward Kashiyama New Design Prize.

Chia, who used Taiwanese models for her first fashion show outside of New York, believes her clothes could be sold to Asian consumers without adaptation.

“We’re absolutely interested in the mainland market … and Greater China will be our most important market in the future,” Chia told The Associated Press.

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Previously on Jing Daily

German Label Marc Cain Takes Unique Approach To Entering Mainland Market

Hung Huang Opens Upscale Made-In-China Boutique, “Brand New China” (BNC)

Will Chinese Luxury Shoppers Embrace The “Logo-Less” Trend?

Who Are China’s Fast Fashion Contenders?

John Woo will receive this year's Golden Lion for Lifetime Achievement

Tomorrow, the 67th annual Venice International Film Festival will kick off in Italy, featuring films from some 34 countries, up from 27 last year. As the New York Times points out today, at this year’s festival “there will be 79 world premieres in the four official sections, chosen from 2,395 feature films from 102 countries — there were 74 in 2009 — with 34 countries making the final lists.” Although the U.S. accounts for the largest non-Italian contingent, with 19 American films taking part, this year seven Chinese films will be shown at the festival, with one — Tsui Hark’s “Dr. Detective Dee and the Mystery of the Phantom Flame” — in competition.

The other Chinese films that will be shown in Venice are Huang Wenhai’s Qiao (Crust) and Xifang qu ci bu yuan (Reconstructing Faith), Stanley Kwan’s Yongxin tiao (Showtime), Xun Sun’s 21 ke (21 Grams), John Woo and Su Chao-Pin’s Jianyu (Reign of Assassins) and Zhang Yuan’s Taikong xia (Space Guy).

In addition to having his new film Reign of Assassins shown at the festival, this year John Woo will receive the prestigious Golden Lion for Lifetime Achievement. Woo will be presented with the award on September 3 at his film’s debut at the festival’s main venue, the Sala Grande.

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Previously on Jing Daily

John Woo’s “Flying Tigers” To Be Filmed In IMAX

Exclusive Interview: Mainstream Chinese Movies Gain Exposure in U.S.

Jing Daily Exclusive Interview With Filmmaker Jia Zhangke (Part 1)

Jing Daily Exclusive Interview With Filmmaker Jia Zhangke (Part 2)

Opel will position itself in the premium segment in China

The Chinese auto market has proven highly enticing for virtually all of the world’s top auto marques, and this week the German automaker Opel — a unit of General Motors — was given the nod by its parent company to begin more aggressively expanding into new markets like China and Australia. Last year, Opel sold 4,000 units in mainland China as part of a pilot program, and now the company is looking break in to the country’s premium auto market — which continues to be dominated by German rivals like Audi, Mercedes-Benz and BMW.

As spokesman Andreas Kroemer told Deutsche Welle this week, ”We will market Opel as a European designed car in the premium segment,” adding that “there are a growing number of Chinese who like European cars and have the money to afford them.”

From Deutsche Welle:

Kroemer declined to say which models Opel plans to sell in China. Currently, GM markets its Cadillac, Chevrolet and Buick brands in the country, in addition to vehicles manufactured by Wuling, a Chinese carmaker in which the US auto giant has a 30 percent stake.

Until now, vehicles made by Opel were only sold outside Europe under GM’s Buick nameplate.

Opel is expected to export cars to China at least until the company builds a stronger market position, but as Christoph Stuermer, an auto analyst with IHS Global Insight, told reporters, Opel will likely have no choice but to begin locally producing at some point in order to sidestep China’s stiff import taxes.

Although German cars enjoy an outstanding reputation in China, we’ll have to see whether Opel has arrived too late to the party. While auto sales remain strong, as the AFP reported earlier this month, there are signs that demand is cooling somewhat as government stimulus efforts are eased and the broader Chinese economy loses some of its breakneck momentum.

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