FRANKFURT (Reuters) - General Motors' <GM.N> Opel unit might make cars for other manufacturers if car parts maker Magna <MGa.TO> becomes its partner, German paper Welt am Sonntag reported, citing unidentified sources close to Magna.

Germany's hunt for a partner for struggling Opel has boiled down to two rival groups, Italy's Fiat <FIA.MI> and Austrian-Canadian Magna, which have been asked to present a full plan within a week, Economy minister Karl-Theodor zu Guttenberg said on May 14.

If Opel has to reduce output of its cars, it could offer capacity to other carmakers such as Peugeot <PEUP.PA> or Ford <F.N>, for example in its factory in Ruesselsheim, the sources close to Magna said, according to the weekly newspaper.

Magna therefore does not plan to close any Opel factories in Germany, while it might shut plants in Belgium's Antwerp and in Luton in the UK, the paper said.

The report comes as carmakers around the world reduce output and close factories as demand for cars is shrinking.

The government was working on a temporary financing deal for Opel in the event GM filed for bankruptcy before a deal with investors was agreed, he said then.

But Opel might still go bankrupt if both Fiat's and Magna's plans prove to be unsuitable, Guttenberg said, according to weekly newspaper Welt am Sonntag.

Fiat's strategy for the German carmaker centres around a three-way merger with Chrysler <CBS.UL> and GM's European operations.

(Reporting by Peter Dinkloh, editing by Will Waterman)

Article Published: 17/05/2009