Magna Deal Prohibits Sale of Opels In The U.S., But Not In Canada


Magna International will not be selling Opel cars in the United States or China, says company CEO Frank Stronach. The head of the Canadian auto parts supplier said that this was part of the deal he worked out with GM when purchasing its European Opel brand.

Interestingly, however, there is no indication that the agreement included the Canadian market.

Stronach has commented that he’d like to manufacture cars in Canada. “We want to build Opel cars in Canada… Canada should have its own Canadian company … a truly Canadian automobile industry.”

While the Canadian market is small, with the latest figures showing about 1.5 million units expected for 2009, it’s not unforeseeable that Magna could look into building Opel cars in Canada. It also makes particular sense as smaller European-style cars (like the Corsa GSi pictured above)  are much more popular in Canada than in the United States.

SMART began selling its fortwo in Canada several years before it even landed in the U.S. and currently Mercedes-Benz sells its compact B-Class in Canada. Honda has also had tremendous success selling a rebadged Civic Sedan as an entry-level luxury car called the CSX (formerly EL) under its Acura brand.

As for the Chinese market, Stronach did say that the deal may be flexible if GM (which still holds a 35 percent share in Opel) could see it as a profitable venture.

Stronach says he expects Opel to break even in just three years and furn a profit in its fourth. He also downplayed any interest in Saturn or Saab, indicating that one major acquisition might just be enough for now.

Additionally, Magna is seeking a $140 million grant from the Canadian government to assist in producing an electric car in Canada. Estimates put an electric car assembly plant at $280 million.

“If we get a loan we know we could speed it up. We could make sure it’s going to be in Canada,” Stronach told Automotive News.

[Source: Automotive News]