What Benefit to Opel?
Magna’s plan is less clear, and representatives of the company could not be reached immediately. According to news reports, Magna, whose annual revenues are around $20.5 billion, will take over Opel in league with Russian carmaker GAZ (GAZA.RTS) and with financial backing from Russia’s Sberbank (SBER.RTS), aiming to build share in the Russian market where Opel is already strong. Magna would also likely use Opel as a kind of automaking outsourcer, producing cars on contract for other brands. That’s a business Magna is already in, and it’s a model used in other industries such as semiconductors and mobile phones. But given that most automakers already have way more factory capacity than they need, it’s questionable whether any would want to hire a third party to build more cars. Opel and Vauxhall, with production of 1.5 million cars a year not counting other GM brands, do not seem to have anywhere near the volume by themselves needed to make money with mid-priced and low-priced cars, eve
