Magna International said today that Nissan Motor will make its new premium compact Infiniti car itself rather than use a Magna Steyr plant in Graz, Austria. The Infiniti deal, first announced last May, would have represented the first Japanese car ever assembled by the giant Canadian-based auto components company whose largest operations are in Europe.
Infiniti said that it intends to manufacture the luxury vehicle in-house at a European production plant. The company owned by Nissan will announce the location and more product details closer to the start of production in 2015. I’m betting one of the versions will be a hybrid – Infiniti’s first?
Back in May, Magna announced that it was working with Nissan on a feasibility study for the car. “This new vehicle represents a significant opportunity for the Infiniti brand to reach new consumers and grow in key markets such as Western Europe,” Andy Palmer Nissan Motor Company executive vice president who is responsible for Infiniti, said at the time. “We are pleased to be working with Magna Steyr to realize this important product,” said Palmer. The car is based on an upcoming Mercedes-Benz front-wheel-drive luxury compact.
Nissan and Daimler will produce Mercedes-Benz 4-cylinder gasoline engines together at Nissan’s powertrain assembly plant in Decherd, Tennessee. Production will begin in 2014, with an installed capacity eventually reaching 250,000 units per year. Decherd will make engines for upcoming Mercedes-Benz and Infiniti models.
The Tennessee plant will initially supply engines for the revised Mercedes-Benz C-Class, to be built at Daimler’s plant in Tuscaloosa, Alabama. Four-cylinder engines – once unheard of in luxury cars – are increasingly being used to meet new fuel economy standards. Front-wheel-drive cars, also once unthinkable for German luxury cars, also appear inevitable.
Daimler and the Renault-Nissan Alliance in April 2010 arranged an equity exchange that gives the Alliance a 3.1% stake in Daimler and Daimler a combined 3.1% interest in Renault and Nissan as both companies try to cut product development costs.
Magna has performed contract assembly for Mercedes-Benz, BMW, Jeep, Ford and Lincoln, among others. In Q2 of 2012, Magna posted $645 million in revenue from its vehicle assembly operations. As a contract manufacturer, Magna has produced about 2.5 million vehicles representing 21 different models. However, Magna has been losing the assembly business as automakers increasingly shop for better deals in low cost countries and/or bring even small production runs in house. BMW, the parent of Mini, has said that the Mini Countryman SUV currently assembled by Magna will not continue in Austria when the next generation debuts.
“We are pleased that Magna remains an important supplier for Nissan Motor Co. Ltd.,” Gunther Apfalter, President of Magna Steyr and Magna International Europe, said today. Well, they are still a customer for the moment.
See:
- Nissan and Daimler to Build Engines in Tennessee
- Ford Shows 2012 Focus Electric Vehicle at Consumer Electronics Show. 2012 Debut for Magna Conversion
- Magna Board Says Bye-Bye Belinda Stronach. Unexpected Result of Deal that Ceded Control of the Auto Parts Giant
