Infiniti cancels plan to have its compact model built by Magna Steyr image

Infiniti, Nissan’s luxury subsidiary, has cancelled plans to build its new front-wheel-drive compact car in Austria at the Magna Steyr plant.

“Although we would have liked to see the assembly of Infiniti’s new compact vehicle realized at Magna Steyr, we are pleased that Magna remains an important supplier for Nissan,” said Gunther Apfalter, Magna’s European chief, in a statement.

nitially, Infiniti had planned to contract the new, unnamed model’s assembly to Canadian auto parts supplier Magna International, but the Japanese automaker has decided to build it in-house instead. The new Euro-style Infiniti, which will use the same front-wheel-drive platform as the Mercedes-Benz A-Class, will be released for the 2015 model year.

Infiniti is hoping that the new car will increase its presence in Europe, where it has so far sold only 4,000 vehicles of its G and M sedans and FX and EX crossovers since launching on the continent a few years ago. By comparison, Infiniti sells that many cars monthly in the United States alone.

The Magna Steyr plant located in Graz, Austria, has assembled a variety of vehicles in the past, including the Jeep Grand Cherokee and the MINI Countryman and Paceman. Neither Jeep, nor MINI plan to renew their contracts with Magna.