Nissan will build the new Infiniti compact car instead of Magna

Article by Christian Andrei, on October 22, 2012

In a reversal of plans, Nissan Motor Co. will build a new Infiniti compact car for 2015 in-house rather than contracting the work out to Magna Steyr, a unit of Canadian supplier Magna International Inc. Since May, Infiniti has been studying if production of this model could be accommodated at Magna Steyr\'s production site in Graz, Austria.

The model is based on a Mercedes front-wheel drive chassis. Nissan said that this feasibility study has been terminated this week with the decision that the vehicle will be built in-house in a production facility in Europe as part of the overall expansion plans of the brand. Infiniti, which reported total sales of about 4,000 cars in Western Europe, estimates that volumes for the compact may be 10 times this amount.

Nissan makes this decision about four months after Nissan appointed Johan de Nysschen, who left as head of Audi of America last spring, as the senior vice president responsible for the global sales of the Infiniti brand. He will be reporting to Andy Palmer, Nissan\'s executive vice president in charge of product planning, business strategy, marketing communications and the Infiniti division.

Palmer announced the initial plan last May about the possible plans for Magna Steyr to build the vehicle. A Nissan spokeswoman declined to reveal the role de Nysschen had in the decision for the new car to be produced in-house.

Magna encountered a setback as BMW said that it’s likely not to renew its contract for Magna Steyr to manufacture the Mini Countryman SUV and Paceman SUV-coupe as soon as their lifecycles have ended. In a statement, Gunther Apfalter, president of Magna Steyr and Magna International Europe, said that even it would have preferred to be given the chance to build Infiniti\'s new compact vehicle, it is still “pleased” that Magna continues to be a vital supplier for Nissan Motor Co.

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