Rivalry: GM, Opel, GAZ

GM announced this afternoon that it will sell part of its stake in its struggling German-based subsidiary, Opel:

General Motors Co. Thursday confirmed that it will sell a 55% stake in German unit Adam Opel GmbH and its U.K. sister company Vauxhall to Canadian car-parts maker Magna International Inc.(MGA) and Russian bank OAO Sberbank (SBER.RS), although issues like financing still need to be resolved.

The potential loss of proprietary technology and/or intellectual property, both being bases of differentiation, also factors into the equation:

One of GM's concerns about selling Opel was the possibility of its technology being copied by rivals. It had rejected a bid for Opel from China's Beijing Automotive Industry Holding, or BAIC, because it was concerned about intellectual property rights going to China, and had similar concerns about the rights going to Russia under a Magna deal.

However, Magna is reported to have tried to assuage these concerns, and GM indicated in its statement that it sees Opel as a joint venture partner going forward, benefiting from shared technologies, development and purchasing.

"The agreement will keep Opel/Vauxhall a fully integrated part of GM's global product development organization, allowing all parties to benefit from the exchange of technology and engineering resources," GM said.

An article published last month provided more detail about the concerns with Magna's  previous Russian partner, automaker GAZ:

In the murky world of Russian capitalism, both Sberbank and GAZ, maker of the Volga sedan, have strong ties to the Russian government, which has made no secret of its desire to help its ailing and outdated auto industry. Russian Prime Minister Vladimir Putin repeatedly has said that the government supports Magna and Sberbank's bid and hopes that the deal would help the Russian car industry. While GAZ is years behind GM and other Western automakers in vehicle technology, GM fears that down the road, GAZ could catch up by getting GM car architecture for Opel's small and midsize vehicles and other property at no cost, using it to compete with GM in its second-largest European market.

Notably, GAZ is mentioned nowhere in the announcement about GM's sale of Opel to Magna. But with Sberbank involved the risk to GM does not seem to have diminished. If its technology or intellectual property ends up in the hands of GAZ, a critical basis of differentiation will have been lost and rival thereby increased.