China's electric giants are pushing to Graz: Magna increases production!

China's electric giants are pushing to Graz: Magna increases production!

A brilliant piece in automotive production! The Graz Magna plant is facing a strategic turning point, since it is about to receive assembly orders from two important Chinese brands, Xpeng and GAC. It is a particularly interesting cooperation, as reported by the Kleine Zeitung . By using the SKD method (Semi Knocked Down), prefabricated parts from China are delivered, which are then completed in Graz. This procedure not only helps manufacturers to bypass customs fees of the EU, but also enables them to test their first market opportunities in Europe with low investments in small series.

This development comes for Magna as called, because the company has struggled with a decline in production figures in recent years. According to vienna.at last year only 71,900 vehicles, a significant decline compared to 105.100 a year earlier. On Top of that, large manufacturers such as Jaguar and in the future BMW and Toyota will be deployed, while the British start-up ineos ended its planned cooperation. In this tense environment, the partnership with XPENG and GAC for Magna could represent an urgently needed rescue line and possibly secure jobs.

production under pressure

Nevertheless, the production situation remains tense because the high wage and production costs in Austria are a challenge. Despite these hurdles, Magna has an excellent reputation in the automotive industry, especially in China, where the company has been successfully operating for two decades. However, the challenge is to reduce the unit costs in order to be able to compete with other manufacturers. Magna therefore plans to expand the partnership by acquiring further overall vehicle projects. Politically, it is a hot iron, since Europe is the important market for the comprehensive announcement of new electric vehicles.

With a lively development program - among others for Volkswagen - Magna could ultimately be strengthened from these difficult times. While the European automobile manufacturers are fighting sales crises, the look at China seems to be the key to stabilization.