Magna International and Guangzhou Automobile Group (GAC) announced that the GAC AION V electric SUV will be assembled at Magna’s Graz, Austria plant, a move that lets GAC sidestep the European Union’s tariffs on Chinese‑made electric vehicles by localizing production within the EU.
Magna’s Q3 2025 results underscore the strategic value of the new contract. Sales rose to $10.06 billion, up 2% from the prior quarter, while adjusted earnings per share reached $1.33, a $0.24 beat over consensus. The company’s adjusted EBIT margin improved to 5.9% from 5.4% in the same period last year, driven by higher volumes and operational efficiencies. Free cash flow climbed to $572 million, up roughly $400 million YoY, giving Magna the flexibility to invest in new production lines and support expanding OEM relationships. Management raised its full‑year 2025 sales outlook to $38.6 billion–$40.2 billion and adjusted EBIT margin to 5.3%–5.8%, reflecting confidence in continued demand for its contract‑manufacturing services.
The EU’s provisional tariffs on Chinese electric vehicles, effective October 31 2024, impose rates ranging from 17% for BYD to 35.3% for SAIC. By assembling the AION V in Austria, GAC eliminates the tariff burden and can offer the vehicle at a more competitive price point in Europe, while also shortening its supply chain and improving responsiveness to local market preferences.
Magna’s Graz facility is designed for flexibility, capable of producing internal‑combustion, hybrid, and electric vehicles on shared lines. While the exact capacity allocation for the AION V program is not disclosed, the plant’s modular architecture allows Magna to scale production quickly and maintain high utilization rates, positioning it to accommodate future EV contracts from other OEMs such as XPeng and Mercedes.
Strategically, the partnership expands GAC’s footprint in key European markets—Finland, Poland, and Portugal—where the AION V has already debuted, and strengthens Magna’s position as a leading contract manufacturer in the growing EV sector. The deal diversifies Magna’s customer base, reduces its exposure to any single OEM, and demonstrates its ability to deliver high‑quality EVs on a global scale.
Roland Prettner, President of Magna Complete Vehicles, said the collaboration “reflects the trust automakers place in Magna’s expertise. Our Graz facility provides flexibility and capacity, allowing OEMs like GAC to localize production efficiently and confidently.” Wei Haigang, President of GAC International, added that “Europe is a vital market in GAC’s global development. Partnering with Magna enables us to bring locally assembled electric vehicles to European customers that reflect GAC’s values of smart technology, sustainability and craftsmanship.”
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