July 19, 2007 / 7:21 PM / 12 years ago

UDDATE 1-Magna in talks with BMW on new Mini SUV - report

(Adds Chrysler plans, stock price; in U.S. dollars unless noted)

TORONTO, July 19 (Reuters) - Magna International MGa.TO is in talks with BMW AG (BMWG.DE) to build a larger version of the upscale German automaker’s trendy Mini cars, Canada’s Globe and Mail newspaper reported on Thursday.

The sport utility vehicle would be called the Mini Colorado, with 65,000 to be assembled annually at Magna’s Steyr plant in Graz, Austria, the newspaper said, citing unnamed sources.

Tracy Fuerst, a spokeswoman for Aurora, Ontario-based Magna told Reuters that the “reports of potential future BMW and Volkswagen assembly programs are speculative and, as a matter of policy, we will not comment on them”.

“As a Tier 1 automotive supplier, we are constantly engaged in confidential discussions with (original equipment manufacturers) regarding potential future business,” she said.

The Canadian autoparts maker is also rumored to be in talks with Volkswagen AG (VOWG.DE) about assembling 20,000 roadsters annually for VW at the Steyr plant, the Globe said.

“It would be positive news for Magna because, as is well known, they are facing the loss of pretty significant volumes,” said David Tyerman, an analyst at Scotia Capital.

The reports came on the same day that Chrysler Group DCXGn.DE DCX.N announced it was shifting full-sized car production from Magna’s Steyr plant to its own Brampton, Ontario, plant, where it will invest $1.2 billion for upgrades of the Chrysler 300, Dodge Magnum and Dodge Charger models.

BMW said in May it planned to pull production of its X3 mid-sized SUV from the Steyr plant and transfer it to its own plant in South Carolina. The X3 represented about 45 percent of total vehicles assembled at Steyr.

“So their assembly facility in Graz, Austria, would be significantly under-utilized and obviously these new programs would help a lot in filling that production hole,” Tyerman said.

Magna shares were off 63 Canadian cents, or 0.6 percent, at C$99.37 on the Toronto Stock Exchange.

Additional reporting by Jonathan Spicer

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