Nissan Motor has decided not to have Magna Steyr assemble Infiniti vehicles under contract and will “assemble its future premium compact Infiniti vehicle in-house”.

Last May the automaker and contract assembler announced a memorandum of understanding relating to assembly of the vehicle on a contract manufacturing basis.

“Although we would have liked to see the assembly of Infiniti’s new compact vehicle realised at Magna Steyr, we are pleased that Magna remains an important supplier for Nissan Motor,” said Gunther Apfalter, president of Magna Steyr and Magna International Europe in a statement.

“Nissan’s project team has affirmed their willingness to work with Magna Steyr if future contract assembly opportunities arise, and we look forward to supporting them as needed.”

Last month, Magna Steyr was forced to deny a Polish report it would take over a former FSO plant in Warsaw to contract assemble vehicles for Nissan and BMW’s Mini. It currently builds Mini’s Countryman and its Paceman spin-off in Graz, Austria. There was more speculation, again denied, earlier this month.

Its first half 2012 complete vehicle assembly sales decreased 11% year on year to US$1.2bn while complete vehicle assembly volume slipped 8% to around 63,000 units.
Magna has lost a considerable amount of contract assembly work from Graz in recent years – offset by winning the Mini deal – as long-term customers such as Chrysler and Daimler have taken work back in house or model lines have reached the end of their production lives.

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