Russia’s ailing car industry took another blow on November 4, as America’s General Motors unexpectedly cancelled the proposed sale of its German Opel unit to a consortium of Russia’s Sberbank and Canada’s Magna. The collapse of the deal, which comes after months of negotiations, is not only a setback for Russia’s auto industry, but also represents a major blow to the government’s entire strategy for modernizing the Russian industry. By bringing in Western technology and management experience, the deal would have given Russian car makers a much-needed competitive edge, and would also have allowed Russia to gain an important foothold in European business, setting a precedent for future Russian investment projects.
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