Magna Steyr to assemble Chinese EVs in Austria

Magna Steyr, a contract manufacturer in Austria, is close to finalizing deals with two Chinese electric vehicle (EV) companies, XPeng Motors and GAC Motor Co. This partnership will allow these automakers to avoid high tariffs on imported cars into the European Union. Magna Steyr will also benefit by increasing its EV production. The company, based in Graz, Austria, has struggled recently after losing contracts to build cars for other brands. Magna Steyr is known for manufacturing models like the G-Class for Mercedes-Benz. After briefly working on the Fisker Ocean SUV, production stopped, leading the company to reassess its output goals and seek new business. Magna Steyr's president noted that multiple Chinese automakers interested in the European market had reached out to them. Reports suggest the upcoming contracts with XPeng and GAC involve a manufacturing method called Semi-Knocked-Down (SKD), where parts will be shipped from China and assembled in Austria. However, while this news is promising, the contracts will not immediately fill all of Magna Steyr’s production capacity. The initial investments from the Chinese firms are expected to be minimal as they test the European market. This strategy helps XPeng and GAC avoid a 20.7% import tariff they would face if exporting directly from China. The contracts could be finalized by June, but Magna Steyr has not publicly confirmed the ongoing talks yet.