China's Beijing Auto says fails in bid for GM's Opel

BEIJING (Reuters) - China's Beijing Auto said intellectual property issues were behind its failure to reach an deal with General Motors over its Opel unit.

General Motors' European business said on Thursday it had agreed to continue detailed talks with both Magna and RHJ International on its German unit Opel, but did not mention Beijing Auto, which had also submitted an offer.

"In the negotiations over intellectual property, we have been in constant communications with U.S.' General Motors," the company said in an e-mailed statement on Friday.

"Regrettably, both parties failed to reach agreement on (the intellectual property) issue," said the company, quoting an unnamed spokesperson.

Beijing Auto did not mention in the statement what are the next possible steps after the end of its Opel bid.

But sources told Reuters this week that the Beijing city government will fully support a bid by the company for Ford Motor's Volvo car unit if Beijing Auto failed in its quest Opel.

Beijing Auto, controlled by the Beijing government, aims to more than double its annual vehicle sales to 2 million units by the end of 2015 from merely 771,639 units in 2008.

But the automaker, ranked fifth in China, does not even have its own car brand. Its four-year old Mercedes-Benz car venture with Daimler AG broke even last year and its tie-up with Hyundai Motor Co <005380.KS> has a long way to go before catching up with top players in the market such as Volkswagen AG .

Beijing Auto did not give details on what products or technology the intellectual property issues were about.

In its bid to General Motors, Beijing Auto had pledged to maintain GM's stake in Opel to the largest extent, to ensure Opel's market share in Europe stable and to support Opel's expansion into the Chinese market, the statement said.

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