GENERAL MOTORS has decided to keep its European Opel brand, following improved business conditions in Europe and the first US sales gain for GM in 21 months.
Calling off negotiations with a Russian-backed group led by Canada's Magna International, GM CEO Fritz Henderson said that the Opel and Vauxhall brands are too important to GM's global strategy.
â€œGM will soon present its restructuring plan to Germany and other governments and hopes for its favourable consideration,â€ Mr Henderson said.
â€œThis was deemed to be the most stable and least costly approach for securing Opel/Vauxhall's long-term future.â€
Mr Henderson said that while the market is still strained as a result of the global financial crisis, the European business environment has improved.
"At the same time, GM's overall financial health and stability have improved significantly over the past few months, giving us confidence that the European business can be successfully restructured.
Focusing on restructuring the core GM brands during bankruptcy, General Motors announced in July that it would sell a 55 percent stake in Opel to Magna and Russia's Sberbank.
While the sale of Opel is now off GM's agenda, Magna co-CEO Siegfried Wolf said that the parts company would continue as a supplier to GM.
"We understand that the board concluded that it was in GM's best interests to retain Opel, which plays an important role within GM's global organization," Mr Wolf said.
"We will continue to support Opel and GM in the challenges ahead and wish to thank everyone who supported the Opel restructuring process for their tireless efforts and dedication over the past several months."
GM said in a statement that it expects the restructuring of Opel to cost around three billion euros, which it described as "significantly lower" than the bids submitted for the company.