The overflow factory of choice for car makers in the UK and Germany is facing an uncertain future after the planned and unplanned ending of contracts leave it with just one vehicle to build.
Magna Steyr in Austria, a division of Canadian automotive giant Magna International, is a contract manufacturer of long-standing that has built more than four million examples of 34 different models to date.
However, the plant is about to be reduced to just the Mercedes G-Class, threatening its future as a going concern.
The storied plant situated in in the eastern city of Graz in the Alpine foothills “is experiencing uncertainty”, Magna’s financial report for the second quarter ending 30 June stated bluntly.
The reason for the uncertainty was “due to the bankruptcy of Fisker; the planned end of production of the Jaguar E-Pace, Jaguar I-Pace, BMW Z4, and Toyota Supra; and Ineos’s decision to not proceed with the Fusilier programme,” the report said.
Magna was particularly exposed to Fisker’s bankruptcy in June after playing a big part in the development and production of the Ocean electric SUV, for which it was partly paid in Fisker shares.
The company booked a $261 million (£205m) impairment hit in the first quarter because of the end of Fisker production and said it was cutting its 2026 sales outlook by $600m (£472m) because of it.
Also in June, Ineos cancelled its Fusilier programme, which was to develop a smaller electric and extended-range hybrid SUV below the Grenadier that was to be built at Graz.
Meanwhile, Graz will stop building the electric Jaguar I-Pace and the E-Pace in December amid JLR’s decision to axe five Jaguar models this year ahead of the launch of a new, more upmarket electric car next year.
No confirmation was given for the end date of the BMW Z4 and related Toyota Supra, but previous reports have said production will finish in 2026.
Magna still has the contract to build the Mercedes G-Class, a model the plant has built continuously since its launch in 1979, originally as an army vehicle. However, global G-Class sales last year were 42,700, which is way below Graz’s capacity. Last year, the plant built 105,100 vehicles in total, itself well down from its recent peak in 2019 when it made 168,822 cars.
Even the G-Class is not as lucrative as it once was, with the company forced to reduce its sales outlook by $900m (£707m) in 2026 after Mercedes reduced the amount of content Magna supplies itself.
Magna’s full-service business model is to develop, build and supply parts from other company divisions such as bodywork. That’s more lucrative than just assembly, which is why it’s taking a bigger hit on reduced G-Class content than the entire loss of assembly of the Fisker Ocean.
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