A sign advertises a car being developed in partnership with Magna. Picture: REUTERS
A sign advertises a car being developed in partnership with Magna. Picture: REUTERS

San Francisco — Canadian automotive supplier Magna International will produce BMW’s new 5-series plug-in hybrid at its Austrian factory, the company said on Monday, part of a strategy to produce electric cars on a contract basis for global vehicle makers.

The BMW 530 plug-in hybrid will be made from this northern summer at Magna’s plant in Graz, Austria, where it plans to start producing Jaguar’s I-PACE sport utility vehicle in 2018.

Global car makers and their suppliers are investing heavily in fully electric and petrol-electric hybrid vehicles.

Consumer demand is still low versus that for petrol engine vehicles, but companies are beginning to offer more choices to respond to government mandates for greater sales of vehicles that emit little or no carbon dioxide and prepare for a future experts believe will be dominated by electric vehicles.

Global car makers and their suppliers are investing fully in electric and petrol-electric hybrid vehicles

Rival supplier Continental, for example, said in April it was increasing spending by €300m on new products such as charging systems and battery management components related to electric vehicles.

Magna, North America’s largest automotive supplier and the third globally, is alone among the top suppliers to perform contract manufacturing for car makers. Its Austrian plant can produce about 200,000 cars a year. Magna is building a new paint shop in Slovenia due to increased demand.

A Magna spokeswoman would not comment on a statement by the Slovenian government in March that the car supplier would invest up to €1.24bn in the country, including a car plant with capacity of 100,000 to 200,000 vehicles a year.

Having contract manufacturing in its portfolio creates a niche for the company as car makers slowly bring more electrified vehicles to market over the next decade. For car makers,
outsourcing the assembly can be an advantage on low-volume models to minimise capital expenditure and avoid tying
up their own production lines.

Reuters

 

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