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29 May, 2009 06:33

Could Opel become a Russian brand?

Russia could about to get a slice of carmaker Opel if the German government approves a bid from the Canadian Magna corporation.

The German company is currently owned by US giant General Motors, which faces bankruptcy, so the American company is trying to sell it. There are few companies in the race to rescue the legendary brand. One of them is a collaboration of Canadian Magna, Russia’s leading state bank Sberbank and Russian car manufacturer GAZ.

“A new money gap of about €300 million has emerged. Two investors are still in the game: Fiat and Magna. But Magna were first to come up with ideas on how to close this huge €300 million gap,” explains German Foreign Minister Frank-Walter Steinmeier.

Should the deal succeed, most of Opel’s production lines will be moved to Central Russia, to the GAZ auto plant facilities. Onlookers say this would be a tremendous boost to Russia’s car industry.

“If Russia acquires the full dealers network and engineering facilities, the original design and everything that Opel has been famous for more than a century, this would be a giant leap into the future for Russian car making industry,” predicts Aleksandr Pikulenko, automotive observer from Echo of Moscow radio station.

A new assembly line and more jobs for GAZ would be a lifeline for Opel’s workers. Even though Magna’s offer seems more lucrative than Fiat’s, the Italian car maker is still not giving up. For the time being, negotiations in Germany over Opel’s sale have stumbled, reportedly because General Motors asked for a higher price. Those at the table are still expecting to seal the legendary German carmaker’s fate by the end of this week.

The Opel brand has an old and rich history in Russian car-making for being economical, powerful and durable. Having taken the best from the Opel, the first Moskvich became an immediate hit in post-war USSR.

Before the Great Patriotic War (during WWII), Joseph Stalin set his sights on the German-made Opel Cadet. This cheap and convenient car impressed the Soviet leader and said Russia needed to have something like it. In 1946, the production of the Moskvich-400 in the Soviet Union began and there was no difference between it and the Opel Cadet.

“For every person born in Moscow, the Moskvich car is our pride. It became the first people’s car, the first breath of fresh air, a feeling of freedom which the country received after victory in the Great Patriotic war,” says car collector Egor Karpunin, who admits that the Moskvich brand is not completely Russian.

“It was accessible to anyone. It cost only 9,000 roubles back then, so an average soviet family had to save money for less than a year to buy it, while similar class cars were twice as expensive. If it broke, one could open a textbook and repair it,” remembers Evgeny Chudakov, retro car collector.

Moskvich’s success came after almost five decades of Opel’s attempts to penetrate the Russian market without too much luck. Opel's founder even presented the Russian Empress with gifts to buy his way into the country’s industry.

Ironically, more than a century on, Opel might after all achieve its mission, but this time as an acquisition.