Magna International may lose Mini contract with BMW

Article by Anita Panait, on October 3, 2012

Magna International could lose its contract with BMW to produce the next generation of Mini cars at its plant in Austria as the German carmaker focuses on the production of the brand’s vehicles in the United Kingdom and the Netherlands. BMW is planning to produce Mini cars at Mitsubishi's NedCar plant in the Netherlands as part of its effort to ease capacity limitations at the brand in Oxford plant in England.

Magna's car manufacturing unit Magna Steyr currently produces the Mini Countryman SUV. Magna Steyr is also set to commence the production of the Mini Paceman, a sportier coupe version of the sports utility vehicle. According to a BMW spokesman, the carmaker is looking to focus on Mini production in Oxford and NedCar in the mid-term.

The spokesman remarked that NedCar offers improved logistics compared to Magna Steyr's plant in Graz, Austria, as it is more proximate to Mini's supplier base that is largely located in the UK. Mini currently operates the Oxford plant, an engine plant in Hams Hall and a steel pressing facility in Swindon. BMW said it has been happy with Magna Steyr's performance and production quality.

The German carmaker quipped that it continues to view Magna Steyr as an important, strategic production partner. A spokeswoman for Magna Steyr remarked that the company has been building cars for BMW since 2003 and looks forward to further business beyond the Mini, as it would be a vital contribution to the “production and development site in Graz."

Dutch group VDL, which has inked an agreement to acquire NedCar from Mitsubishi for a notional EUR1, will start building Mini cars at the plant in 2014. Mitsubishi is terminating the production of its Colt minicar and Outlander SUV at NedCar at the end of 2012.

Topics: magna, mini, bmw

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