Jul19
July 19 2007
http://money.cnn.com/2007/07/19/autos/magna_bmw.reut/
TORONTO (Reuters) -- Magna International is in talks with BMW AG to build a larger version of the upscale German automaker's trendy Mini cars, Canada's Globe and Mail newspaper reported Thursday.
The sport utility vehicle would be called the Mini Colorado, with 65,000 to be assembled annually at Magna's Steyr plant in Graz, Austria, the newspaper said, citing unnamed sources.
As CEO leaves, profits and sales for "ultimate driving machine" excel. CNN's Jim Boulden reports. (August 2)
Tracy Fuerst, a spokeswoman for Aurora, Ontario-based Magna told Reuters that the "reports of potential future BMW and Volkswagen assembly programs are speculative and, as a matter of policy, we will not comment on them".
"As a Tier 1 automotive supplier, we are constantly engaged in confidential discussions with [original equipment manufacturers] regarding potential future business," she said.
The Canadian auto-parts maker is also rumored to be in talks with Volkswagen AG about assembling 20,000 roadsters annually for VW at the Steyr plant, the Globe said.
"It would be positive news for Magna because, as is well known, it is facing the loss of pretty significant volumes," said David Tyerman, an analyst at Scotia Capital.
Chrysler scraps luxury car plans
The reports came on the same day that DaimlerChrysler's (up $0.21 to $92.17, Charts) Chrysler Group announced it was shifting full-sized car production from Magna's Steyr plant to its own Brampton, Ontario, plant, where it will invest $1.2 billion for upgrades of the Chrysler 300, Dodge Magnum and Dodge Charger models.
BMW said in May it planned to pull production of its X3 mid-sized SUV from the Steyr plant and transfer it to its own plant in South Carolina. The X3 represented about 45 percent of total vehicles assembled at Steyr.
"So its assembly facility in Graz, Austria, would be significantly under-utilized and obviously these new programs would help a lot in filling that production hole," Tyerman said.
Magna (up $0.14 to $95.33, Charts) shares were little changed in late-session trading on the New York Stock Exchange.
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