FRANKFURT (Reuters) -- General Motors' Opel unit returned to China's main auto show after a five-year absence with three new cars at the center of a long-promised push into the word's largest market.
At the Shanghai auto show on Saturday, Opel gave China debuts to three models set go on sale in the country this year: its flagship Insignia ST wagon, the Astra GTC coupe and Zafira Tourer minivan.
Opel's head of international operations, Juergen Keller, said the new models represent three types of vehicles that are becoming more popular among China's growing younger generation: station wagons, minivans and coupes. "Opel products are well suited to meet the demands of these younger consumers," Keller said in a statement.
In March, Opel's new CEO, Karl-Thomas Neumann, appeared to emphasize China's potential soon after taking office, but he appears to have scaled back his China ambition.
"To become a big brand (in China) we would have to invest hundreds of millions of euros," Nuemann told Germany's Bild newspaper in a recent interview. "We have other priorities."
Opel has distanced itself even from a modest 30,000-vehicle sales target advanced by Neumann's predecessor last year. "We do not provide details on volume targets," an Opel spokesman said.
Opel's China strategy is likely to be undermined by a tiny dealer body, painful import tariffs and fierce competition from other GM brands.
In China, Opel faces competition even from its own models with the Astra hatchback and sedan already made in China by GM as the Buick Excelle XT and GT, and the Insignia rebadged by Buick as the Regal. Import tariffs also add a formidable hurdle for all carmakers, increasing the sticker price of an Opel built in Europe by about 25 percent.
Opel sold through its 22 Chinese showrooms only 4,500 cars during all 2012 -- half of the mostly locally-built cars GM sold on average each day in China during the first quarter.
Rival Volkswagen Group imported just 6.2 percent of its first-quarter Chinese car sales, or 48,000 vehicles, and manufactured the rest inside the country.
Metzler Bank analyst Juergen Pieper said Opel's sales in China won't do anything for profits, but it's a start at least. "Chinese car buyers are known to favor German brands so there is a chance that it could take advantage of that to grow over the next year or so."
Opel's labor leaders and politicians are publicly pressuring GM management to seek out export opportunities to compensate for the moribund European market. China certainly has more potential than most of the other markets that Opel has entered in the past 24 months, such as Chile, Singapore, Israel and the United Arab Emirates.
"Opel remains a political issue in Germany so this is also a message directed at its audience back home but in the end Buick clearly has priority in China for GM," Pieper said.
In Germany, the China push may please unions and politicians anxious to preserve jobs in an election year but analysts say it falls far short of earlier hopes for an overseas sales revival for the European brand.
Opel badly needs to expand beyond Europe, where it is losing money at an alarming rate -- $1.8 billion last year -- as it struggles to cover the fixed costs of factories operating far below capacity.
GM's plans to develop Opel in China amount to little more than "lip service" to the brand's potential, said Edmunds.com analyst Michelle Krebs. "One of Opel's problems is that it isn't sold globally, so the brand is dependent on shrinking European demand," she said. "But they're only dipping their toes in the Chinese market."