Magna Steyr will not build next-generation versions of the four-wheel-drive Mercedes-Benz E class medium-premium sedan and G class premium SUV.

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The loss is a bump in the road for the rapidly growing Austrian contract assembler. Another will come if BMW decides to shift production of the X3 premium SUV from Magna Steyr to one of its own factories.


Mercedes plans to incorporate the next 4wd E class into its own factories. In Europe, Mercedes builds the E class in its plant in Sindelfingen, near Stuttgart.


“We will have a further integration of four-wheel-drive technology and a common vehicle floor structure” for the new E class, said Hans-Heinrich Weingarten, Mercedes’s director of production.


The next-generation E class is due in 2009 or 2010.

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When the current E class was launched in 2002, Magna Steyr’s plant in Graz, Austria, helped Mercedes meet the initial high demand for the car. Graz is the sole source for the 4wd E class, which must be modified to make room for the drivetrain. Magna Steyr’s contract for the project runs until 2010.


Last year, Magna Steyr built about 25,000 units of the 4wd E class and 6,000 units of the G class.


The next G class, which will be called the GL, will be built solely at Mercedes’s US plant in Vance, Alabama, alongside the new M-class SUV and R-class sport wagon. The three models share a common platform.


The launch of the Mercedes GL class early next year won’t mean an immediate end for the G class.


Magna Steyr’s contract to build the vehicle runs until the end of 2006, but may extended.


The coachbuilder developed the G class for Mercedes and started production in 1979. The rugged but expensive SUV, known as the GelŠndewagen (German for sport- utility vehicle), has developed a cult following.


BMW is said to be considering building the second-generation X3 in-house. The SUV has reached a high enough volume for it to be added to a BMW plant. Magna Steyr built 112,800 X3s last year.


Magna Steyr has seen production soar to 227,000 units last year from about 80,000 units in 2001.