Magna Steyr, the vehicle assembly and engineering division of Magna International, is scouting for a second location to assemble vehicles on contract for the world’s automakers.

“We are looking for a second location outside of Austria,” Gunther Apfalter, president of the division, told investors and analysts at a recent investor day at a Magna training centre outside Toronto. If the business case works, Magna Steyr would assemble vehicles in Eastern Europe or Asia, Apfalter said.

Magna Steyr’s existing facility in Graz, Austria, produces six models for four different vehicle manufacturers and consists of the Steyr-Daimler-Puch operations Magna purchased in 1998 and the former Eurostar factory that was once the only Chrysler Corporation assembly plant outside North America until Magna bought it in the 1990s.

The factory now assembles the G-class sport utility vehicle for Mercedes-Benz, Peugeot’s RCZ, the Aston Martin Rapide, the Mini Countryman and Paceman for BMW and the aluminium bodies of the SLS AMG for Mercedes.

But many other potential customers are making inquiries, Apfalter said.

Magna Steyr’s heaviest production volume in recent years was the BMW X3, but the German automaker shifted production of the crossover to its US plant in South Carolina late last decade as a way of offsetting the rise in the value of the euro against the US dollar.

Both eastern Europe and China are growing markets and global automakers are boosting vehicle production in the two regions.

They are also low-cost vehicle manufacturing centres that have attracted billions of dollars in investment, including a Mercedes-Benz plant that is under construction in Hungary.  

As well as helping Magna to strengthen its relationship with its customers, Magna Steyr has helped the Canadian-based auto parts giant to gain intimate knowledge of how vehicles are put together which has helped its other divisions, which manufacture systems and components.