Geely, Magna held talks on Chinese stake in Opel-source

• Source: Gasgoo.com
• [10:37 September 18 2009]
• Comments

China's Geely Automobile Holdings has approached Magna International (MGa.TO) about a potential partnership on car maker Opel, a source familiar with the matter said Thursday, marking the Chinese automaker's latest attempt to chase a Western brand.

Talks between the Chinese automaker and the Canadian auto parts supplier included the possibility of Geely taking a stake in Opel, but Magna is refraining from any such partnership for now, said the source, who declined to be identified because the talks were private.

Geely executives could not be reached immediately for comment.

Geely's gesture to Magna, which came after it publicly admitted its interest in Ford Motor's (F.N) Volvo car unit recently, underscores Chinese automaker's growing ambitions to be global players.

But industry analysts said Chinese automakers, weak in their home market, will find it challenging to handle overseas auto assets given their limited international exposure.

"I think it will be hard for Geely to have a piece of the Opel deal in the first place. Magna's already got a Russian partner and involvement from a Chinese firm will make it very complicated," said Li Mengtao, an analyst with Sinolink Securities.

"It also makes little sense for Geely if it ends up being a minority shareholder with little access to the technologies it desperately needs."