How Magna Steyr balances customers ranging from BMW and Mercedes to Fisker and Sony

Frank Klein spent the first 27 years of his automotive career at Daimler, where one of his professional highlights was setting up Mercedes-Benz's car factory in Hungary. The investment helped Mercedes to become a major player in the compact car segment. Two years ago, Klein joined Magna Steyr, the contract manufacturing arm of Magna International. He is president of the Austria-based company that produces cars such as the full-electric Jaguar I-Pace, the iconic Mercedes G-Class and will soon add the Fisker Ocean SUV. In addition, Magna Steyr is helping Sony to become an automaker. Klein spoke with Automotive News Europe Managing Editor Douglas A. Bolduc.

Did anyone think 10 years ago that Magna Steyr would become one of the industry's most diverse makers of electric cars?

That's a tough question. Based on the strategy the team has put together about 10 years ago, we knew that electric mobility would play a bigger role in the future. What no one could anticipate is the dynamic speed that the shift to electric mobility has taken in the last few years. There are new automakers that entered the market that have really challenged the traditional car manufacturers. Also, people have become more sensitive about the environment, governments are pushing new regulations and we had the diesel scandal. So, if you put everything together, it all had a significant impact on the move toward electric mobility. We are convinced that the future will be electric. Therefore, we are very happy that we were the first contract manufacturer to build a battery-electric vehicle, the Jaguar I-Pace. When you also look at engineering, we have about 4,500 engineers worldwide and about 40 percent to 50 percent of the engineering work we are doing right now is already related to battery-electric vehicles.

Magna Steyr's customers include Toyota, BMW, Jaguar and Mercedes. How do you balance the different needs of these very different companies?

These are all very demanding customers, which means we have to deliver every day. We have to focus on premium quality every day, which is what we do for every traditional automotive customer. That has helped us gain a really good reputation with the new entrants.

Magna Steyr will supply the vehicle platform and build the electric carmaker Fisker's Ocean SUV. In addition, your parent company has the right to purchase a stake of up to 6 percent in Fisker. How did this deal come together?

It all started with us being awarded engineering and manufacturing work for Fisker. As we went along and as we started our discussions, we realized it made sense to have a stake in the company. It really ties us to the success of this product and brings us closer together. Bringing a new product to market is a very challenging adventure. Magna and Magna Steyr are completely committed to do everything possible to make sure this is beneficial for both sides. Whenever a new player enters the automotive market, it is a risky adventure. So, with this approach, what we will try to do is reduce the risk. We cannot eliminate it, but we can reduce it.

Is this the start of a new business model for Magna Steyr to help lure other newcomers?

There are a lot of new entrants out there, but we have to be very careful and we evaluate with whom we really want to work. That's why we decided to work with Fisker. We believe that they have a very high rate of success. They have a fascinating product. They have a fascinating team. But there are sometimes new entrants that approach us where we believe that they will not be successful and then we decide not to work with them.

Another interesting new partner for you is a Sony. How did that relationship form and how will it develop?

Sony approached us and said they have an idea. They wanted to build a prototype that they would to show at the 2020 CES [in Las Vegas]. We worked with them for more than one and a half years to bring this prototype to the point where it could be driven onto the stage. This was a great cooperation with an incredible partner. After the success of the 2020 CES, Sony asked us to build more prototypes and to test this product. So, that's what we did. You probably have seen the videos of the car being driven in Austria. We'll certainly continue working with them.

One of the cars that automatically gets associated with Magna Steyr is the Mercedes G-Class. What does that vehicle means to the company after producing it for decades?

Actually, we have been building the G-Class for exactly 42 years. We also support the Daimler team also with engineering work. It is an amazing product. Just walking down the assembly line, I see people who have been working on the G-Class for 30, 40 years. They know exactly what it means to deliver this incredible performance on a daily basis. A lot of people define Magna Steyr with the G-Class.