Magna Steyr’s Austria Plant Secures Two New Orders as XPeng and GAC Utilize Third-Party Production to Enter Europe

According to a report by CLS on November 24 (by reporter Liu Yang), Guangzhou Automobile Group (GAC) has officially launched a full-vehicle assembly partnership with Magna Steyr’s Austrian plant, shortly after XPeng initiated a similar collaboration. The announcement was made at the opening of Auto Guangzhou 2025, marking another key step for Chinese EV makers in advancing local production in Europe.

GAC stated that the cooperation extends across manufacturing, supply chain, and sales operations. The pure electric SUV AION V from GAC Aion has already begun production at Magna’s Graz facility, a plant known for its flexible manufacturing system capable of producing ICE vehicles, hybrids, and EVs on a shared line. GAC has entered markets such as the UK, Poland, Portugal, and Finland, with plans to begin delivering the AION V and AION UT in Europe in Q1 2026.

Industry analysts point out that producing small-batch SKD (semi-knockdown) units in Europe not only helps GAC sidestep the EU’s tariff pressure on Chinese EVs but also allows the company to gradually accumulate local manufacturing experience while reducing early-stage risks.

XPeng took this route earlier in September, when it launched its first Europe-based production project at the same Magna facility—also marking Magna’s first full-vehicle assembly collaboration with a Chinese automaker. The first XPeng G6 and G9 units have rolled off the line, and XPeng plans to produce a wider range of models including sedans, mid-size SUVs, compact SUVs, and high-performance EVs.

XPeng Vice Chairman and Co-President Brian Gu noted, “Our locally built vehicles will reach tens of thousands of units in Europe. A global automaker cannot rely solely on exports—we must build local operations and align ourselves with local stakeholders. This is essential for any company with global ambitions.”

Magna’s Graz plant has more than 125 years of vehicle manufacturing experience and has produced over 4 million vehicles. It also previously cooperated with BAIC to produce ARCFOX models in its Zhenjiang factory in China.

Industry observers believe that the combined strategies of GAC and XPeng highlight both Chinese EV makers’ determination to deepen their presence in Europe and Magna’s strategic importance as a global contract manufacturer. Meanwhile, Leapmotor is partnering with Stellantis for production in Spain, Chery is advancing a joint project with Spain’s EV MOTORS, and Great Wall Motor is evaluating plant locations in Germany and the Czech Republic.

Consulting firm AlixPartners forecasts that by 2030, Chinese automakers will expand their annual production capacity in Europe by 800,000 units, increasing their market share from 4.5% to 10%.

As BYD, Geely, Chery, GAC, and others establish R&D, manufacturing, and sales networks across Europe, the industry consensus is clear: local production is no longer optional. “Exporting cars from China and relying on domestic supply chains no longer works in Europe,” said an industry insider. “To compete, automakers must build fully compliant local systems, connecting production, sales, and after-sales with European regulations and market needs.”