New Opel owner Magna says that, for the time being, they will not be able to sell their cars in either the United States or China. Company chairman Frank Stronach says that this was part of the deal struck with former Opel owner GM, but the terms could change in the future.
"...keep in mind that General Motors -- we've been working together for 50 years, we've been great partners, and they still own 35 percent [of Opel]," Stronach said during a press conference. "If it makes economic sense you might persuade people to change something."
Magna takes the managerial role of Opel and Vauxhall, despite owning only 20% of the automakers. However, they have partnered up with Russia's largest bank, Sberbank. The two institutions combine for a 55% ownership stake in the company. Employees of Opel own 10%.
According to Magna, Opel should begin turning a profit by 2013. Just because the numbers look good for Opel, do not think that Magna will try to acquire either Saab or Saturn.
Stronach told reporters, "We have to digest Opel now, and we have got a mouthful, so we'll see how quickly that will take place."
Magna is going after sizable Canadian grants and loans to fund development of all-electric vehicle systems. The company would like to build an EV plant in Canada, at a cost of C$300 million, to begin producing electric vehicles inside of three years. Magna already has a strategic partnership to produce electric systems for Ford prototypes.
"I'm very confident that Magna will be amongst the leaders in selling and building electric cars," Stronach said.
Magna unable to sell Opels in US and China
Opel Insignia OPC Sports Tourer
By Zack Newmark
June 3, 2009 3:01 PM
Filed Under: American, Corporate/Financial, German, Industry, Opel
Comments
DieselDog
June 3, 2009 3:08 PM
This is a nice poison pill to go along with GM's "sour grapes" attitude. It is apparent that GM believes that since they can't manage long-term viability of selling schlock in the USA, that the buyer of one of their companies [Opel] shouldn't be able to, either. As for Magna, why would a company buy another company if the seller contractually limits the marketablity of future product? Am I missing something here, or is the world full of corporate screw-ups and blow-hards?
Bristol411S3
June 3, 2009 4:43 PM
Yes, signing a deal that limits you from selling in the world's two largest car markets would seem a little dumb. But then Opels are not sold their currently and it would take some time to ready products for those markets, so I guess they're hoping they can talk around whoever ends up owning GM in the meantime.
alessandro
June 3, 2009 3:50 PM
Bang! "We do not able to do this and sell this..." is started. Selling OPEL to Magna was a Germans political decision to please Americans (GM) and Russians (1 of 3 Magna owners) in one hit which is absurd and lacking just a political tradition in first hand. What a deal, losers!
Edited by user on June 3, 2009 at 7:47 PM
coopergt
June 3, 2009 8:08 PM
wow, what a bad deal that sounds like to me. look for bankrupt opel/magna soon.
abey
June 4, 2009 7:29 AM
thats not such a bad deal. its not like they will go bankrupt from not being able to expand where they arent already. obviously its not ideal, i guess magna figured they didnt actually need china and usa
MutantSushi
June 4, 2009 8:25 AM
Maybe it solely pertains to selling Opels that contain GM technology/ platforms? If/when Opel differentiates it's platforms enough, then they might be free to sell in the US/China against GM...? Otherwise, it seems just a bizarre limitation on selling a BRAND (that I doubt has more than 1% recognition in either market).
Like the article says, for the forseeable future they look to be working with Ford alot in North America (+Europe?), and they could always buy/start a new brand not called "Opel" if they want their own marque in the US (if production sharing with Ford isn't satisfactory enough).
Same deal with China... Even more so, given the extent to which joint ventures play a huge role in the Chinese car market. If VW operates largely thru JV's in China, what's the difference if Magna-Opel's Chinese JV sells under the Opel brand or under "Middle Kingdom Motors" (for example)?
Edited by user on June 4, 2009 at 8:25 AM
NarF
June 4, 2009 1:28 PM
Reason why GM wont allow Manga to sell Opels in China and the States is that the award winning Insignia is already sold in China as an Buick Regal and will be soon sold in the States as the new Buick LaCrosse. Plus all the Saturn Astras floating around in the States wont do justice to the Opel or the Saturn name plate. Plus GM didnt sell Opel outright because the want to benifit from Opel's future technology!
Schizo0223
June 5, 2009 4:57 AM
If my understanding is correct the Korean versions of the Insignia will be produced locally. So perhaps the US and Chinese versions will be produced locally as well...which means Magna will not have anything to do with production of those cars.
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