Infiniti has ended a feasibility study of third party manufacturing (by Magna Steyr) of a “a new compact premium vehicle” and said it was “moving ahead with plans” for a scheduled launch in 2015 of a model it would make “in-house” in an as yet unnamed European factory.

Magna Steyr had confirmed earlier it would not now build the vehicle for Nissan’s luxury brand as outlined under a memorandum of understanding inked last May.

Nissan has factories in Spain and the UK and builds the Qashqai and Note in England and various light commercial models in Europe. The British factory is scheduled to build the Leaf EV and its battery packs from 2013.

“Infiniti intends to manufacture the vehicle in-house in a European production plant. The company will announce a production location and more product details closer to the start of production,” the automaker said in a statement.

“Infiniti still intends for the all-new compact premium vehicle to share a platform developed with Mercedes. The expanding partnership between the Renault-Nissan Alliance and Daimler, which began in 2010, includes powertrain and platform sharing, joint development of fuel-efficient vehicles and other projects worldwide.

“All design, engineering and development work continues on schedule.”

New agency Reuters said Infiniti had been considering if Magna Steyr’s production site in Graz was suitable for the new model which will be based on a Mercedes front-wheel drive chassis.

Magna would not comment.

Infiniti, which has sold about 4,000 cars in western Europe in total, reportedly believes volumes for the compact could be 10 times that amount.

The setback for Magna came after BMW said it would likely not renew the contract for Magna Steyr to build the Mini Countryman SUV and Paceman SUV-coupe once their lifecycles have run out, Reuters noted.

Most independent contract carmakers in Europe have either been rescued by fresh investors, sold off in parts or filed for insolvency because their customers already have more than enough spare factory space of their own.

Only premium carmakers have struggled with production bottlenecks as they expand their model range, moving downmarket into small car segments traditionally home to volume brands, the news agency added.

In July, Daimler awarded independent Finnish car manufacturer Valmet Automotive a contract to build over 100,000 Mercedes-Benz A-Class from 2013-16.