Magna may lose Mini production
Magna International is likely to lose production work with Mini as parent BMW looks to concentrate output of new-generation Minis in the UK and the Netherlands.
BMW plans to build cars for its Mini brand at Mitsubishi's NedCar factory in the Netherlands to ease capacity constraints at Mini's plant in Oxford, England.
Magna's car manufacturing subsidiary, Magna Steyr, currently builds the Mini Countryman SUV and later this year will also begin producing the Paceman, a sportier coupe version of the SUV, the seventh derivative of the Mini.
A BMW spokesman said in the mid-term the company is looking to concentrate Mini production in Oxford and NedCar. He said the Dutch plant in Born would offer improved logistics versus Magna Steyr's plant in Graz, Austria, since it was closer to Mini's supplier base, which is largely situated in the UK.
In England, Mini operates the Oxford vehicle plant as well as an engine factory in Hams Hall and a steel press in Swindon, where it employs about 5,500 people.
BMW said it has been happy with Magna Steyr's performance and production quality. The automaker sees Magna Steyr 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 cars will be built at the NedCar factory starting 2014 by Dutch group VDL, which has signed a deal to buy the factory from Mitsubishi for a notional 1 euro. Mitsubishi is ending production of its Colt minicar and Outlander SUV at the plant at the end of the year.
NedCar has an annual capacity of 200,000 units on a two-shift basis.
VDL aims to turn the plant into an independent car manufacturer for third parties, just like Magna Steyr, under the name VDL NedCar.
Theo Toussaint, executive vice president at VDL, said the BMW order is big enough to make a slight profit. "Contracts run for five to seven years so we have plenty of time to get more business," he said.
VDL declined to comment on projected production volumes and which Mini models NedCar will build.
Kay Segler, head of the Mini brand, said the company will announce shortly its production plans for NedCar. "We are currently discussing this NedCar," he told Automotive News Europe at the Paris auto show last week.
Segler said Mini's plant in Oxford currently builds "five vehicles, 22 hours a day" and cannot do much more. Mini needs extra capacity for the additional models it plans, he said.
Mini sales have increased by 8.3 percent to 192,652 vehicles in the first eight months thanks primarily to the success of the Countryman, whose sales were up 23 percent to 63,817, making it the brand's second-most popular body style.
Reuters, Nick Gibbs and Johan Dillen contributed to this report