Fisker’s Woes Leave Magna Steyr Scrambling to Make Up $400 Million Loss

• In 2023, the first year of Ocean production in Graz, Austria, Magna Steyr built about 10,000 vehicles before the Fisker relationship soured and assembly halted. Canadian parent company Magna International announced that the shutdown is permanent.

• Despite a somber mood at the plant, business goes on as Magna Steyr seeks new contracts to offset the $400 million in lost revenue the supplier was banking on for 2024 from the Fisker program.

• For many years, rugged combat-ready 4x4s and military motorcycles came out of the Steyr plant, but the company’s modern era of higher-volume passenger vehicle programs didn’t start until the 1990s, after which four million vehicles were produced in Graz.

You might not know much about Magna Steyr, but you surely know this Austrian manufacturing plant’s most famous vehicle: the boxy, military-derived Mercedes-Benz G-Class, which has been rolling off the Graz assembly line since 1979.

You may have also seen Magna Steyr in the news much more recently for the famously failed Fisker Ocean, a battery-electric luxury crossover that launched more than a year ago in Graz but has now stopped production because Fisker Inc. has run out of money.

This is the second time Danish founder Henrik Fisker has proven that automotive designers make questionable businesspeople: His sleek Fisker Karma plug-in hybrid came to a screeching halt in 2012 as insolvency loomed and after Hurricane Sandy destroyed an entire European shipment of 338 Karmas. Fisker failed to repay $139 million to the US government for a loan he’d gotten to build the Karma.

This time around, Fisker leaves Magna Steyr with a gaping hole in its Graz assembly operations. There are three buildings, one dedicated to the G-Class, one hall for the Jaguar E-Pace and I-Pace, and one for the BMW Z4 and Toyota Supra. It’s the third building where Magna Steyr built the Ocean, alongside the Z4 and Supra.

In 2023, the first year of Ocean production, Magna Steyr built about 10,000 vehicles before the Fisker relationship soured and assembly halted. Canadian parent company Magna International announced that the shutdown is permanent, while Fisker is trying to unload its remaining vehicles at deep discount.

Here in Graz, the mood is downbeat after the company dismissed 450 production workers because of the Fisker work stoppage. And yet business goes on as Magna Steyr seeks new contracts to offset the $400 million in lost revenue the supplier was banking on for 2024 from the Fisker program.

“As a leading automotive contract manufacturer, we are open for business and actively engaged in discussions with potential customers,” Magna Steyr President Roland Prettner tells Autoweek during a media tour of the Graz plant. “Our capacity is not a limiting factor. We welcome opportunities to collaborate and meet the needs of our clients.”

Between the three assembly halls in Graz, Magna Steyr can build up to 150,000 vehicles, and there’s plenty of capacity for more. Another vehicle is scheduled to come on board: the Ineos Fusilier battery-electric crossover, expected to reach the market in 2027.

Magna Steyr already has a relationship with Ineos by providing engineering services to the British startup in launching the Grenadier 4x4 SUV and Quartermaster pickup. Graz isn’t building the Grenadier or Quartermaster, but Magna Steyr helped Ineos launch production of those vehicles at a former Mercedes-Benz plant in France.

An ideal production volume at the Graz plant is at least 25,000 vehicles annually, Prettner says. Unlike a few years ago, that number today could represent an ambitious target—especially for a battery-electric vehicle program, considering slowing demand for EVs.

In China (where EV demand has been more brisk), Magna Steyr has a reasonably new relationship with the BAIC Group and a joint-venture plant that began manufacturing the ArcFox series of four B- and C-segment battery-electric vehicles. The plant, in Zhenjiang, can make up to 180,000 vehicles per year.

In Europe, Magna Steyr is seeing just how eager the Chinese automakers are to sell vehicles in the West. “For the last 12 months, we have seen very strong activity from all the Chinese OEMs and (they are) contacting us to explore opportunities,” Prettner tells journalists.

“I think a lot of that will depend on how tariffs will be set up and how the rules of the game will be in Europe to sell vehicles here,” Prettner says. “We understand all the Chinese OEMs are testing today with different distributors, what they think the volume could be of their vehicles.”

Magna Steyr is celebrating 125 years in business here in Austria, and the first complete vehicle to roll off the Graz assembly line was the wooden-wheeled 1906 Voiturette.

For many years, rugged combat-ready 4x4s and military motorcycles came out of the Steyr plant, but the company’s modern era of higher-volume passenger vehicle programs didn’t start until the 1990s. By 2001, the plant produced its first million vehicles. The two million threshold was crossed in 2006, then three million in 2012.

By September 2022, Magna Steyr had produced a total of four million vehicles—that’s 34 different models from 11 automakers over the years.

In addition to the G-Wagen, Magna Steyr’s Graz plant has built these other vehicles on a contract basis over the past 40 years: Jeep Grand Cherokee and Commander; Chrysler Voyager and 300C; Audi V8L; Mercedes-Benz M-Class and E-Class; Saab 9-3 Cabrio; Mini Countryman and Paceman; Aston Martin Rapide; and BMW 5-Series and X3.

Much of the production volume reflects an unusual level of flexibility to manufacture a wide mix of vehicles with diesel, gasoline, and hybrid powertrains on the same assembly lines. In some cases, vehicles from different brands share one production line.

In 2017, Magna Steyr for the first time produced an EV (Jaguar I-Pace) on the same line as an internal-combustion model (Jaguar E-Pace).

This flexibility factors into Magna Steyr’s attempt to drum up more business to replace Fisker. For instance, Magna Steyr only produces the BMW Z4 but provided no engineering services, while the Ineos Grenadier program was the other way around.

And the ArcFox program in China represents the holy grail for Magna Steyr’s business model, entailing both vehicle engineering and manufacturing.

“All we need is the vision from our customer, and everything else we then could do,” Prettner says of design, testing, and prototyping.

Was the Fisker Ocean on your EV shopping list? If so, have you found a suitable replacement? Please comment below.