Magna Steyr to Build Vehicles for Jaguar Land Rover

Tata Motors Ltd.'s Jaguar Land Rover unit has signed a contract with Magna International Inc.'s Magna Steyr unit to build an unspecified number of vehicles at the contract manufacturer's plant in Graz, Austria.

The additional capacity will allow JLR to keep pace with growing demand and add new models without the cost of constructing a new factory. Its three U.K. plants currently are operating at nearly full production.

JLR's initial Austrian-built model likely will be the E-Pace, a smaller version of the upcoming Jaguar F-Pace midsize crossover/SUV, according to Auto Express. It says the subcompact E-Pace will be introduced in 2020.

The F-Pace, which will be unveiled in September at the Frankfurt auto show, will be built at JLR's plant in Solihull, England.

JLR previously announced plans to invest $5.6 billion on new vehicles and other capital expenditures in 2015-2016. The company opened a plant in China last year and is building a new facility in Brazil.

Magna Steyr currently builds the Mini Countryman and Paceman minicars for BMW, Mercedes G-Class crossover vehicles for Daimler and Peugeot RCZ sport coupes for PSA Peugeot Citroen.