Porsche set to pull Magna deal

Porsche is considering rescinding an existing contract to build the next generation Boxster and Cayman at Magna in Austria from 2013, and may instead move production to Karmann in Germany.

In a move aimed at protecting closely guarded engineering and production cost secrets relating to its upcoming entry level roadster and coupe pairing, Porsche insiders say plans established under former boss, Wendelin Weideking, to build the Boxster and Cayman at Magna’s Graz factory in Austria are now being heavily reviewed following the latter’s bid to rest control of financially embattled Opel.

Porsche’s review of future Boxster and Cayman production comes hot on the heels of threats from parent company Volkswagen’s chairman, Martin Winterkorn, at the recent Frankfurt motor show, where he suggested the German car making giant, which is in the process of purchasing Porsche, may be forced to seek a new engineering partner if Magna’s plans to purchase a majority stake in its key rival Opel ultimately prove successful.

Since its introduction in 1996, Porsche has regularly relied on Valmet in Finland for the production of the Boxster depending on demand. In recent times, however, it has been brought back in-house, with production now taking place at Porsche’s traditional Zuffenhausen factory on the outskirts of Stuttgart along with the mechanical identical Cayman.

Porsche’s decision to move production from Valmet to Magna was originally made on cost and logistic grounds, although insiders now suggest the future Boxster and Cayman could end up hailing from Karmann, which recently entered bankruptcy protection following the loss of key contracts, including the Mercedes-Benz CLK cabriolet.

The loss of engineering work from Porsche and Volkswagen would be a major financial blow to Magna, which is already reeling from a major downturn in contracts in the wake of the world economic crisis. No firm figure has been placed on what the Porsche and Volkswagen contracts are worth, although insiders put them at “in the hundreds of million” per year bracket.

Still, they may not be the only car maker considering their relationship with Magna. BMW officials say an internal study has been kicked off to establish whether plans to build next year’s Mini Crossover at Magna could be advantageous to Opel.

Greg Kable