The Russians are coming; no, the Chinese are coming. Beijing Automotive Industry Corporation's five minutes-to-midnight bid for General Motors' Opel business seems, at first blush, to have several points that might commend it to the US carmaker and German government. For a start, it offers GM a residual 49 per cent stake in Opel, beating the 35 per cent GM would keep under the Russian-backed offer from Canada's Magna.
BAIC is also offering an equity investment of €660m, and requesting only €2.64bn in state loan guarantees – against the €4.5bn demanded by the Magna consortium. And it plans a $2bn Opel factory in China, giving the German brand a foothold in the world's most promising car market.
But this also poses a problem. China is already one of GM's leading growth markets, and it would not want to compete there with its own subsidiary. More importantly, concerns about transferring technology to Russia have been a sticking-point in talks with Magna and its state-owned Russian partner, Sberbank. Sensitivities would be even greater with a sole, majority, Chinese partner. At least Magna's bid is structured to give the Canadian group the lead role. Moreover, BAIC's pledge to keep Opel's German plants open is understood to last only two years. After that, it could start shifting production back home.