Steyr Targets N.A. for 2008

Magna Steyr Fahrzeugtechnik AG & Co. KG is aiming to establish a vehicle manufacturing presence in the U.S. by 2008, which would function much like its operation in Graz, Austria, where it produces six vehicles for three different auto makers.

Magna Steyr additionally aims to launch similar operations in the Asia/Pacific region within the same timeframe, Manfred Eibeck, director-production technology, says at the inaugural AutoMan Global manufacturing conference in Dearborn.

Eibeck, however, tells Ward's that 2008 is not so much a “target” etched in stone as it is the expected time for expanded operations. Currently the 3-year-old Magna International Inc. offshoot is optimizing its footprint and core competencies in Graz while consolidating operations elsewhere.

“We will (build a manufacturing campus) where we can make a business case,” Eibeck insists, adding: “There is no real project on the table.”

He says a North American plant would not be located near existing assembly plants to give Magna Steyr a logistical advantage. “You should not be too close to your customers.”

Expansion may come sooner rather than later as Graz production is nearing its capacity of 260,000 units. With the addition of the BMW X3 line to its facility, Graz has reached production of 1,000 units per day and is expected to exceed 200,000 units this year and to top 2004 levels in 2005.

Eibeck says the company will need to establish a fresh footprint elsewhere because “we don't want to expand” in Graz. Magna Steyr's only opportunity for respite wouldn't come until 2006, when its contract with DaimlerChrysler AG to build Chrysler Voyager minivans is up for renewal.

Currently the supplier is studying Canada, Mexico and the U.S. as possible entries into North America as a “niche” producer, but the company will not move forward in the region until it has a signed contract with at least one OEM to build cars here.

The company has not decided on a manufacturing locale in North America or elsewhere, Eibeck cautions. “There are 25,000 possibilities, so one or the other makes sense,” he says, pointing out that none will make absolute sense until Magna has a customer handing it a product to build.