Opel Cannot Sell in the US and China

By Henny Hemmes
Senior European Editor
The Auto Channel

After a take over by Magna International, car manufacturer Opel/Vauxhall is not allowed to sell cars in the US. Last weekend, General Motors came to terms with Magna International and its Russion partners and the German government on the sale of 65 percent of its European division.

Government Motors is not only protecting the US market, but also the Chinese. Magna’s chairman Frank Stronach informed the media a news conference in Ottawa.

Upon the question if the agreement applies to China too, he said, "Yes, for the moment, but keep in mind that we've been working together with General Motors for 50 years, we've been great partners, and they still own 35 percent (of Opel)."

He suggested the ban on Opel sales in China might be flexible. "If it makes (economic) sense you might persuade people to change something."

Last Monday, President Obama volunteered that there would be no commercial restrictions for Opel. Stronach expect Opel to break even in three years.

He does not have a lot of interest to buy Saturn and Saab too: "We have to digest Opel now, and we have got a mouthful, so we'll see how quickly that will take place," he said.

Stronach was in Ottawa to talk to the Canadian government about funding for a project to build electrical systems for EVs and eventually also electric vehicles. Mr. Stronach said to be very confident that Magna will be amongst the leaders in building and selling electric cars. He also demonstrated a Ford concept with a Magna electrical system.

A new plant would cost around $ 280 million and would preferably by built in Canada, but also some American states and European countries are interested in the business.

Magna hopes to get a federal loan for half that amount under Canada's Automotive Innovation Fund, which is meant to support R&D projects to build greener vehicles. If Magna gets a loan, the company can speed up the project and expects mass production could begin in three years.