TORONTO (CP) -- Magna International Inc.'s ambitious move deeper into automaking hit another obstacle as BMW, Magna's second-largest customer, warned that the close relationship between the two companies could be in jeopardy, the Globe and Mail reported.
BMW fears Magna will go from parts supplier to competitor if the Canadian company fulfills its goal of leaping into the ranks of mass producers through an ownership stake in Adam Opel GmbH.
If Magna does so, BMW will need to ensure its technology does not fall into Magna's hands.
In interviews at the Frankfurt Auto Show on Tuesday, BMW chief financial officer Friedrich Eichiner said Magna's agreement to purchase Opel might change the entire relationship his company has with Magna.
"Magna has always been a strong supplier to us," Eichiner told the newspaper.
"However, with Magna acquiring control of Opel, this creates a new situation which we will have to assess. We will not put into question any running contracts with Magna. But where we see conflicts of interest, when it involves innovative technologies, such as new (drive train) technologies, this of course could create a conflict of interest in the future."
The relationship is crucial for Magna. BMW generated 19 per cent of Magna's US$23.7 billion in sales last year.
The parts maker assembles vehicles on contract for auto makers through its Magna Steyr division, including the X3 sport utility vehicle for BMW in Austria. Although that is being shifted to a BMW factory, the parts company has won another contract to assemble a vehicle for BMW's Mini division.
