Magna to Purchase $1Bn Worth of Parts from China

Since it received GM's final blessing to take over Opel, Magna is trying various market strategies under the pressure of major partners, including BMW and Volkswagen, who threatened that they might pull out of their ongoing contracts. This time, Magna is looking into reducing costs with the help of China, one of the largest auto sectors in the world. Basically, what Magna is trying to do is to take advantage of the low costs in the country and purchase $1 billion worth of spare parts by 2012.

According to a report by gasgoo.com, Magna has raised its budget for China from $262 million in 2006 to $407 million in 2008 and is looking to increase it once again to achieve the aforementioned goal.

Meanwhile, Magna has to resolve the issues it has with Volkswagen, including the German brand's new ally Porsche, and BMW, who raised concerns that the recently-approved Opel takeover would influence their businesses. The two large carmakers are claiming that Magna's role might turn the company into a rival, as the Canadian - Austrian manufacturer might attempt to help Opel, detrimental to other carmakers.

The Opel takeover process doesn't work well either. Opel workers across Europe have started protesting against the projected job cuts, asking the European Commission to investigate the deal and decide whether the Canadian - Austrian partsmaker should receive the go-ahead.

With rumors hinting that Magna might close the Antwerp factory, Opel employees joined forces and even traveled to Belgium to support their local counterparts. Magna is yet to comment on all these stories so the situation is far from getting simpler.