When car manufacturing is completely outsourced to 3rd-party companies

The largest contract car manufacturer in the world though is Magna Steyr.

Automakers offer a wide range of products across different markets around the world. While many of the models are produced in-house, a bunch of them are outsourced to 3rd-party companies. This outsourcing process is called ‘Contract Manufacturing’ wherein the 3rd-party company takes up the contract to build the entire car for a particular brand.

Contract manufacturing companies have their own production and assembly plants where they build a number of vehicles for multiple OEMs. This method of manufacturing vehicles offers a lot of benefits to automakers. Some of these include a minimal amount of downside risk to OEMs, offering auto brands to balance fluctuating market situations, helping OEMs keep up with any excessive demand when a new product is launched and offering short-term buffer capacity during production peaks or product phaseouts.

Christian Eick, New Business Development & Marketing Head, Wilhelm Karmann GmbH, stated, “We offer the expertise to develop and produce entire vehicles. Can cover the total chain of value-added production, including body-in-white, paint, final assembly and delivery of the vehicle to the customer.” He added, “Time to market is one of our main strengths. We have the flexibility to cope with different market requirements over the years and over the months.”

Wilhelm Karmann is a contract manufacturer who has previously worked with DaimlerChrysler to produce the Chrysler Crossfire sports car. Partnering with the OEM, Karmann (a 3rd-party company) managed to manufacture and deliver the car within just 18 months from the start of the project. Karmann is also known to have built cars like the Volkswagen Beetle, Volkswagen Golf (Mk1, Mk2, Mk3 and Mk4), a few Porsches, Mercedes-Benz CLK, BMW 6-Series, Ford Escort and even the Land Rover Defender to name a few.

The largest contract car manufacturer in the world though is Magna Steyr. The company is known for building cars for various OEMs, including DaimlerChrysler, General Motors and BMW, to name a few. The Austrian contract manufacturer has built cars like the BMW X3, BMW Z4, Mercedes-Benz G-Class, Jaguar I-Pace, Jaguar E-Pace, 2018 Toyota Supra and even the W Motors Fenyr SuperSport. Magna is also said to have previously manufactured cars like the Audi TT, Mercedes-Benz E-Class 4Matic and the Aston Martin Rapide.

Magna Steyr is currently looking to expand to the USA by setting up EV plants. The contract manufacturer is said to start production of the Fisker Ocean soon and is also likely to manufacture the Mercedes-EQG sometime next year.

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