Nissan reverses plan to have Magna build Infinitis in Austria
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FRANKFURT -- Nissan Motor Co., reversing course on a plan announced in May, said it will manufacture a new Infiniti compact car for 2015 in-house instead of contracting the work out to Magna Steyr, a unit of Canadian supplier Magna International Inc.
Infiniti had been investigating since May whether contract carmaker Magna Steyr's production site in Graz, Austria, was suitable for the model, which will be based on a Mercedes front-wheel drive chassis.
"Infiniti ended the feasibility study this week and has decided to produce the vehicle in-house in a European production facility as part of the brand's overall expansion plans," the automaker said today.
Infiniti, which has sold about 4,000 cars in western Europe in total, believes volumes for the compact could be 10 times that amount.
The decision comes about four months after Nissan tapped Johan de Nysschen, who stepped down as head of Audi of America last spring, to become senior vice president in charge of the Infiniti brand worldwide.
He reports to Andy Palmer, Nissan's executive vice president in charge of product planning, business strategy, marketing communications and the Infiniti division. Palmer made the original announcement in May about the plans to use Magna Steyr for the vehicle. A Nissan spokeswoman had no immediate comment on what role de Nysschen might have played in the decision to bring the new car's production in-house.
Magna response
The setback for Magna comes after German carmaker BMW said it would likely not renew the contract for Magna Steyr to build the Mini Countryman SUV and Paceman SUV-coupe once their lifecycles have run out.
"Although we would have liked to see the assembly of Infiniti's new compact vehicle realized at Magna Steyr, we are pleased that Magna remains an important supplier for Nissan Motor Co.," said Gunther Apfalter, president of Magna Steyr and Magna International Europe, said in a statement.
"Nissan's project team has affirmed their willingness to work with Magna Steyr if future contract assembly opportunities arise, and we look forward to supporting them as needed."
Most independent contract carmakers in Europe have either been rescued by fresh investors, sold off in parts or filed for insolvency because their customers already have more than enough spare factory space of their own.
Only premium carmakers have struggled with production bottlenecks as they expand their model range, moving downmarket into small car segments traditionally home to volume brands.
In July, Daimler awarded independent Finnish car manufacturer Valmet Automotive a contract to build more than 100,000 Mercedes-Benz A-Class compact cars from 2013-16.
More recently, improved logistical ties to its supplier base in Britain prompted BMW to give VDL NedCar a contract to build Mini cars earlier this month.
Reuters and Philip Nussel contributed to this report.
PRESS RELEASE: Compact Premium Vehicle from Infiniti Moves Ahead with Development in Europe
• Infiniti ends feasibility study over third-party manufacturing
• All-new model will be manufactured in-house in European facility
• All engineering and development work continues on schedule, with start of production in 2015
Paris, October 19, 2012 — Infiniti is moving ahead with plans to develop a compact premium vehicle with a scheduled launch in 2015.
Infiniti intends to manufacture the vehicle in-house in a European production plant. The company will announce a production location and more product details closer to the start of production.
Infiniti still intends for the all-new compact premium vehicle to share a platform developed with Mercedes. The expanding partnership between the Renault-Nissan Alliance and Daimler, which began in 2010, includes powertrain and platform sharing, joint development of fuel-efficient vehicles and other projects worldwide.
Infiniti began a feasibility study with supplier Magna Steyr in May this year to determine a possible third-party production site in Europe for the premium compact Infiniti. However, Infiniti ended the feasibility study this week and has decided to produce the vehicle in-house in a European production facility as part of the brand's overall expansion production plans.
All design, engineering and development work continues on schedule.
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