European carmakers have welcomed General Motors' decision to hang on its European Opel and Vauxhall brands rather than sell them to the consortium led by Canadian supplier Magna International and Russia's Sberbank.

Some manufacturers were concerned about keeping Magna as a supplier when it would also be a rival car maker.

Volkswagen has dropped a threat to stop awarding contracts to Magna according to the German newspaper Bild today. A spokesman for VW told the publication: "If Magna doesn't act like a competitor, we will continue to do business as usual."

When Magna bid for Opel, top-level VW executives such as Chairman Ferdinand Piech voiced concerned that the auto supplier would become a competitor.

Daimler CEO Deiter Zetsche said that GM was right to keep control of Opel rather than selling it off and effectively walking away from Europe's main markets. Opel's chance of survival is better being part of a larger group, he added.

In an interview with Dow Jones Newswires he criticized GM, however, for the process by which it initially decided to sell Opel to Magna then changed its mind. Zetsche also said German Chancellor Angela Merkel's involvement in the Opel sale process in the run-up to Germany's federal elections last month wasn't "prudent."

He added: "There are some bad feelings between GM and Germany's political and labor leadership, but people are pragmatic and solutions will be found."