VIENNA – Infiniti and Magna Steyr Fahrzeugtechnik sign a memorandum of understanding for the assembly of a future entry-level compact vehicle for the Nissan luxury brand.

The deal follows an existing engineering assignment from Infiniti already under way at Magna Steyr.

Production of the as-yet-unnamed model is due to start in 2014.

“This new vehicle represents a significant opportunity for the Infiniti brand to reach new consumers and grow in key markets such as Western Europe,” Andy Palmer, Nissan’s executive vice president responsible for Infiniti, says in a prepared statement. “We are pleased to be working with Magna Steyr to realize this important product.”

The luxury compact is part of global expansion plans for Infiniti, which aims for 500,000 unit sales annually by 2016.

“Providing a possible glimpse of the future, Infiniti showed its Etherea concept, a compact luxury hybrid at the Geneva auto show last year,” Nissan says in a statement.

The new model is expected to be based on Daimler’s MFA compact platform that underpins the new Mercedes-Benz A- and B-Class models. Cars based on the MFA platform are manufactured in Daimler’s plants in Rastatt, Germany, and Kecskemet, Hungary.

Daimler, Nissan and partner Renault have a deal in which the three auto makers will share platforms and powertrains.

“We are very delighted to sign this first vehicle assembly agreement with Infiniti,” Günther Apfalter, president of Magna Europe and Magna Steyr, says in a statement. “It is an important milestone to further diversify Magna Steyr’s customer portfolio as a supplier of engineering services and complete vehicle assembly.”

Details of the agreement are being finalized, and there is no official word about planned volumes. It also is unclear whether the new Infiniti is to be assembled at Magna Steyr’s plant in Graz, Austria.

Magna Steyr is in negotiations to buy the Fabryka Samochodow Osobowych car plant in Warsaw, Poland, and it appears to be considering an alternative solution in Hungary, as well.

The company manufactures the Mini Countryman, Peugeot RCZ, Mercedes G-Class and Aston Martin Rapide cars in Graz. It will add production of the Mini Paceman in late 2012.

Output of the Rapide will move to Aston Martin’s Gaydon, U.K., plant in the year’s second half.