Magna’s Expanded Car-Making Does Not Include Apple car

Magna has no plans to make the Apple car. Or a Google car. But the Canadian auto parts giant that also does contract manufacturing is looking to add plants in North America, Europe and Asia for traditional customers including BMW, Mercedes-Benz and Fiat Chrysler Automobiles.

There have been media reports that Magna Steyr, a division of Magna International, is the front-runner to build the Apple car after talks with BMW and Mercedes-Benz fell apart in disputes over who would control the project and the data. Magna was seen as a logical choice because the Magna Steyr plant in Graz, Austria, already assembles vehicles for other carmakers.

Magna Steyr is currently hiring 3,000 more employees on top of the 9,000 already in place to increase capacity from 100,000 vehicles a year now to 200,000 next year. Gerd Brusius, vice president of sales and marketing for Magna International in Europe, including Magna Steyr, said the hiring will be done by mid-2017 to make six models.

But it is all spoken for. “We are full at Graz; no capacity,” Brusius said. There is no room to add Apple car production nor are there plans to do so, he said.

Graz has been ramping down current production and tooling up for the six new products.

Mercedes

One of the vehicles continues to be the Mercedes-Benz G-Class, the iconic boxy and exotic SUV that has been largely hand-built in Graz since 1979. It was on the verge of being discontinued many times and was to be replaced by the M-Class almost 20 years ago. But as long as there were buyers and it remained profitable, Mercedes kept tweaking and selling the first-generation Gelandewagen. It notched more than 3,600 sales in the U.S. last year and global sales were enough to warrant a second shift of production but the G-wagen is due for an update.

BMW

Three of the new cars to be built in Graz are for BMW. The German automaker has not made it official, but there has been enough leaked information to unofficially say they include the new 5 Series to be shown at the Paris Motor Show this fall and the replacement for the Z4 and its Toyota Supra counterpart. BMW and Toyota have been working on a new sports car platform since 2012 and the end result will be a soft-top roadster for BMW that could be renamed Z5, and a hardtop coupe for Toyota reviving the Supra name. The Supra went out of production in 2002.

Jaguar Land Rover

The final two vehicles are for Jaguar Land Rover, which has said the contract with Magna is to build new future vehicles, not moving production of an existing model.

The end result is no room at the inn to add Apple car production in Austria.

And Brusius said there are no contracts in the works to build an Apple car in another plant even though Magna is looking to expand its manufacturing base globally.

More plants being studied

In Europe, Magna is talking to automakers about future contracts to justify adding a second plant in Eastern Europe. Brusius is hoping for a decision by the end of the year on whether to proceed.

In North America, BMW and Mercedes are at capacity at their plants in Spartanburg, South Carolina, and Vance, Alabama, and could use about 30,000 more vehicles, Brusius figures. Magna could justify a plant with a capacity of 60,000. Magna is also talking to Fiat Chrysler Automobiles where CEO Sergio Marchionne wants someone to build compact and midsize cars in the future. He no longer wants to build the Dodge Dart and Chrysler 200 in his own plants, preferring to use FCA plants to make more profitable trucks, SUVs, and minivans. Magna has a long history of making Jeeps and even minivans for Chrysler in Austria.

“North America is an opportunity, no question,” Brusius said. Site selection research began three or four months ago and all the necessary information should be in place by year end. He is hoping for a decision on a North American plant in mid-2017. At this point, production for Apple or Google is not part of the discussions.

In Asia, a determining factor is China’s electric vehicle policy and regulations which will dictate the pace and nature of the country’s vehicle production. There could be room for a Magna plant devoted to electric vehicles in the region in the future.

While all these plant feasibility studies progress, Brusius stresses the top priority is the launch of the six vehicles in Graz starting next year.

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