Magna International on Wednesday acknowledged the loss of the BMW X3 contract assembly programme.

“[BMW] has informed us of its intention to commence in-house assembly of the next generation X3 in Spartanburg, South Carolina, following end of production of the current generation [model] at our Graz, Austria facility,” Magna said in a statement.

It added that, while the end of production is at the automaker’s discretion, Magna Steyr expects run-out in 2010.

“We are currently a significant supplier to BMW’s Spartanburg facility,” Magna noted.

Magna Steyr has been the sole source of the X3 since production began in 2003. The company was also involved in developing and production-engineering the small SUV but BMW was always coy about how much of that it outsourced.

X3 production represented approximately 45% of total vehicles assembled at Magna Steyr in 2006.

“We are in discussions with customers about future potential assembly opportunities for our Graz facility,” Magna said.

It is also losing Chrysler minivan production at Magna Steyr when the current model built there for markets outside North America ends this year. Production of the redesigned 2008 model line is being consolidated in North America.