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23 May, 2009 05:32

Russia to produce Opel cars?

The well-known German automobile brand is on sale. Several bidders from Europe and North America are in the running, but an alliance which includes Russia’s GAZ appears the most likely winner.

Well-made, reliable, and cheap – Opel has been building this reputation for its cars for decades. But that hasn't stopped the automotive giant from driving itself to the brink of bankruptcy.

The Opel dealership in Moscow sells family cars as well as sport and luxury autos – from the newest top-of-the-range Insignia, to the small and sporty Corsa hatchback.

Despite the recent downturn, sales experts are optimistic.

“We feel that the sales fell a bit, but it’s not critical. People are interested in this brand, and they have not abandoned it. There are many loyal customers and the make itself is quite interesting,” says Denis Sidorov from the Opel dealership.

Nevertheless, General Motors – the current owner of the Opel brand, may sell the company in less than a month.

Among the bidders is the alliance of Canadian car maker Magna, Russia's Sberbank, and the GAZ automobile plant.

If the deal goes through, GAZ proposes extra production at a plant in Central Russia. Sources in the automotive industry say the GAZ bid is favoured by the Germans, as other possible buyers – among them Fiat and the US-based investor Ripplewood – promise drastic job cuts and plant closures.

But what’s in the deal for Russians? GAZ, which recently launched an assembly line for its own version of the American Chrysler Sebring called the Volga Siber, seems to have big plans for other foreign makes.

The plant tried hard to keep and develop its own models, but their sales fell a long way short of the world-famous brands.

“If we acquire the whole dealer network, the engineering facilities, the original design, and everything for which Opel has been famous for more than a century, this will be a giant leap into the future for Russia’s car making industry,” says Echo of Moscow radio automotive observer Aleksandr Pikulenko.

The Kremlin has long been actively supporting domestic automakers calling for higher taxes for imported cars, and offering special deals for purchasing cars made in the country.

It’s expected that Opel’s German and American owners will make a decision on the bid as early as the beginning of next week. With every fifth employee’s job on the line, the stakes are high for both the company’s managers and plant workers.