Global automotive components supplier Magna International is to invest nearly €86m to build a new paint plant in Slovenia because of pressure of business at its vehicle contract manufacturing operation in Graz, Austria.
A build up of contract construction orders from car manufacturers including BMW and Jaguar Land Rover and a “full book of business” at Graz means the Canadian group must add a second paint shop 75kms away in neighbouring Slovenia.
Magna broke ground on the new paint shop in Maribor near the Austrian border on 17 October and the company has begun recruiting a workforce which will eventually top 400. The unit should be completed by late next year with start up due in 2019.
Aurora, Ontario-based Magna currently assembles the BMW 5 series and the Mercedes G-Class vehicles at its Austrian Magna Steyr plant with Jaguar E-PACE beginning to launch shortly and the Jaguar I-PACE expected to be launched early in 2018.
“High demand for engineering and contract manufacturing by automakers such as BMW, Mercedes-Benz and Jaguar Land Rover has resulted in the Graz facility running at high capacity utilisation,” Magna said in a statement.
Taking that into account along with other upcoming programmes, Magna Steyr plant should be contract manufacturing 200,000 vehicles per year by 2018, it added.
Today, Magna is the world’s third biggest auto parts manufacturer with 327 production plants across 29 countries. With its comprehensive parts range and contract manufacturing expertise, Magna stands apart from most competitors.
“The all-in-one competence is vehicle engineering and manufacturing puts Magna in an unique position in the global automotive supply industry, which we continuously push forward with new investments,” declared Günther Apfalter, president of Magna International Europe and Magna Steyr.
There were doubts earlier this year that the new paint facility would finally be constructed in Slovenia. Magna suggested that if the Slovenian authorities delayed construction consent further for the unit in Maribor, it could opt instead to build the paint shop in Hungary where it recently won a permit to locate another development at Zalaegerszeg, close to the Slovenia border.
Consent was delayed in case of an appeal against the go ahead on environmental grounds which could have delayed the project by weeks or months. Slovenia was reportedly under pressure to approve the plant with more at stake.
Magna was prepared to invest up to €1.24 billion in the country to create some 6,000 jobs overall in several spending phases in the next few years representing one of the largest foreign investments there, the Reuter news agency quoted the national authorities as saying.