Magna unit to become backup factory for Porsche

A Magna unit will start producing Porsche Boxsters, like this one on Porsche's production line in Stuttgart, Germany, in 2012. (Thomas Kienzle/Associated Press)

German luxury automaker Porsche AG has chosen a unit of Magna International to take over overflow production of two of its sporty cars in 2012.

Magna Steyr, based in Austria, won the contract to produce the Boxster and Cayman models which Porsche lacks the capacity to produce itself. Magna Steyr won because it offered the lowest price, Porsche said in a news release.

Magna, based in Aurora, Ont., was also favoured because of its "high development capacity and competence," deputy chair Holger Härter said. Terms were not disclosed.

Magna's factory in Graz, Austria, will take over from Finnish manufacturer Valmet Automotive.

Härter said the Valemt had done well, producing more than 200,000 cars of outstanding quality over 11 years, so the decision to change was not a vote against the Finnish company, but a vote for Magna.

Magna will make vehicles that Porsche's plant can't produce. Magna already makes parts for Porsche.

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