There were 56,400 vehicles that rolled off the production line at Magna Steyr in Graz in the first three quarters of the year. For comparison: In the same period last year there were 83,700 – a third more. The challenging situation in which Magna Steyr’s entire vehicle production in Graz finds itself is also reflected in the quarterly balance sheet presented yesterday. If you only take the third quarter of the year up to the end of September, there were 15,500 cars assembled in Graz, and in the third quarter of 2023 there were still 22,900. One of the reasons cited in the quarterly report is the fiasco surrounding the US electric car manufacturer Fisker, which had to stop production in Graz after bankruptcy. By the end of September, sales at Graz’s complete vehicle production had fallen year-on-year from $4.34 billion to $3.78 billion, and the operating result (adjusted EBIT) fell from $81 to 74 million.
It is inevitable that production figures in Graz will continue to fall for the time being. Jaguar production (E-Pace/combustion engine and the electric I-Pace) at Magna Steyr will end at the end of the year. It is a turning point for the Graz factory; the I-Pace, for example, was considered a pioneer of e-mobility. By 2024, a total of 70,000 units could be sold since the start of production in 2018, but the use in the large autonomous robotaxi project of the Google subsidiary Waymo, which is running in several American cities, counts much more.
The Jaguar I-Pace © AFP / Jason Henry
The big challenge for Magna Steyr in Styria: Finding a customer so that they can plan the future, because from 2026 BMW/Toyota will also say goodbye, then only the Mercedes-Benz brand will remain, which produces the “G” in Graz lets. And the order from FourSeven, an English electronics brand, financed by a sovereign wealth fund from the Arab region, can probably not be realized in Graz until 2026/2027 at the earliest. The electric Fusilier from Ineos has been postponed for the time being.
1,000 fewer employees than in autumn 2023
Since autumn 2023 alone, 1,000 employees have left Magna Steyr in Styria. Generous severance pay programs are still running, but the retirement models are being phased out. The VW crisis and the automotive crisis in the entire industry are affecting Magna Steyr and Magna itself. In Germany, three plants have been and will be closed this year alone, and over 40 have been built in total.
For Styria and Magna Steyr, a lot now depends on whether they can even find Chinese customers who will produce in Europe due to the punitive tariffs decided by the EU. GAC representatives were there recently, and Geely was also mentioned as a potential customer among others. Chery is also an issue. We reported several times.
Ongoing negotiations also in China
The Magna Steyr management is also constantly traveling to China for negotiations and exploratory talks. There is a lot at stake for Magna Steyr and the factory in Graz, because the cost structure will be crucial. The higher the punitive tariff, the greater the chance of being able to compensate for the forecast additional costs of around 20 percent at the Graz location. Four to five percentage points can always be achieved through optimization, the rest is difficult, said an insider.
China’s manufacturers are currently taking a close look at who voted for the tariffs and against the tariffs in the tariff dispute. Austria abstained, which does not necessarily improve the position. In addition, Magna comes into competition with other European manufacturers. Stellantis (Peugeot, Citroen, Fiat, Alfa, DS etc.), for example, is already using its own factory in Poland to produce the Chinese brand Leapmotor. Other manufacturers may want to sell plants to the Chinese or cooperate – because partnerships already exist in China.
On the drip of the auto industry
In Styria there are also a number of companies that depend on and rely on the car industry. Magna Powertrain recently had to cut 200 jobs. Magna Presstec produces structural parts and chassis components in Weiz and Lebring; the most important customers are Audi and Porsche. Magna Heavy Stamping builds pressed parts and body components in Albersdorf. Of course, all of them depend on the orders from the manufacturers, i.e. the number of vehicles built.
