FRANKFURT - German carmaker Volkswagen has dropped a threat to stop awarding contracts to Magna after the Canadian auto supplier failed to buy rival carmaker Opel.

If Magna doesn't act like a competitor, we will continue to do business as usual, a spokesman told German mass-circulation tabloid BILD in an article published on Friday.

When Magna bid for Opel, Volkswagen executives grew concerned that the auto supplier would become a competitor, but General Motors subsequently decided to keep its Opel unit.

(Reporting by Edward Taylor, editing by Will Waterman)