Magna may lose BMW's Mini car contract for Austria

Mon Oct 1, 2012 3:16pm EDT
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By Christiaan Hetzner

FRANKFURT (Reuters) - Canadian automotive group Magna International Inc (MG.TO: Quote) may lose the contract with BMW (BMWG.DE: Quote) to build the next generation of Mini cars at its Austrian plant as BMW looks to concentrate Mini production in Britain and the Netherlands.

Graz-based contract car manufacturing subsidiary Magna Steyr currently makes the Mini Countryman sports utility vehicle (SUV) and later this year will also begin producing the Paceman, a sportier coupe version of the SUV, the seventh derivative of the Mini.

"We let Magna Steyr produce the Countryman and the Paceman ... but in the mid-term we are looking at concentrating Mini production in two locations, namely Oxford and NedCar (in Born, Netherlands)," a spokesman for BMW said on Monday.

He added that the Dutch plant in Born would offer improved logistics versus Graz, since it was closer to the supplier base which is largely situated in the UK.

Mini operates the Oxford vehicle plant as well as an engine plant in Hams Hall and a steel pressing facility in Swindon, where it employs roughly 5,500 people.

BMW emphasized that the company has been happy with Magna Steyr's performance and production quality, and continues to see it as "an important, strategic production partner, with whom we would like to continue working together in the future."

A spokeswoman for Magna Steyr said the company has manufactured cars for BMW since 2003, and looks forward to further business beyond the Mini since it would be a "key contribution to the production and development site in Graz."

Mini sales have increased by 8.3 percent to 192,652 vehicles in the first eight months of 2012 thanks primarily to the success of the Countryman SUV. BMW sold 63,817 vehicles of the brand's second-most popular body style since the beginning of the year, an increase of 23 percent.   Continued...