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Magna's next car to be powered by electricity

Leaps into environmentally friendly market with plans to build plug-in hybrid autos

AUTO INDUSTRY REPORTER

AURORA, ONT. -- Magna International Inc. has joined the race to develop a plug-in hybrid car and plans to have a prototype on the road next year or in 2010.

Frank Stronach, founder of Canada's largest auto parts company, is looking to take advantage of the seismic shift to more environmentally friendly automotive technologies and play a key role as the industry works to design fuel-saving alternatives to the century-old internal combustion engine .

"You don't have to be a great scientist to know that we're going to be out of oil sooner or later," Mr. Stronach said.

New technologies such as hybrids offer a great market for Magna's parts and its ability to build complete vehicles, Mr. Stronach said in an interview, noting that cars with Magna-developed hybrid engines are already being tested in Europe.

That's where Magna is developing the plug-in hybrid, which runs mainly on electricity produced by batteries. That compares with current hybrids, which run mainly on gasoline supplemented by electric power generated through braking and batteries. Magna has also developed a hybrid that runs on compressed natural gas.

Auto makers - General Motors Corp. in particular - see plug-in hybrids as one of the key technologies to help reduce fuel consumption and meet strict new U.S. government goals to improve the fuel economy of vehicles by 2020.

The Magna project is being run out of the Magna Steyr manufacturing and research and development operations in Austria. It is being led by Herbert Demel, chief operating officer of vehicles and powertrain for Magna, and Burkhard Goeschel, chief technical officer of vehicles and powertrain.

The main Magna Steyr engineering centre consists of about 1,200 engineers in Graz, Austria, adjacent to the assembly plant where Magna Steyr assembles complete vehicles under contract for GM's Saab division, Chrysler LLC, BMW and Mercedes-Benz.

But engineers and researchers in virtually all Magna divisions are working on projects designed to assist in the plug-in hybrid program, taking advantage of the parts company's diverse areas of expertise, such as development of lightweight metals, new uses for plastics, expertise in development of engines and engine components, and its experience in co-ordinating complete vehicle assembly.

The parts giant, based in Aurora, Ont., has set aside an initial budget of $30-million to develop the car, Mr. Stronach said. Magna has vowed never to compete with the auto makers it supplies, so it could manufacture such a vehicle on a contract basis for one of its customers or assemble the car under its own brand for niche markets in which its customers don't participate.

Mr. Stronach said lithium ion batteries so far appear most promising to hold an electrical charge that will power a car for short-distance travel.

GM, for example, was initially planning that its Chevrolet Volt plug-in hybrid would travel about 60 kilometres before it needed to be recharged.

The most formidable barrier for all plug-in hybrids will be the cost of the battery, said Brett Smith, assistant director of the manufacturing, engineering and technology group of the Center for Automotive Research, an industry think tank in Ann Arbor, Mich.

"At $2 [U.S.] a gallon it was an impossible barrier, at $4 or $5 a gallon it becomes less of a barrier but it still is an enormous cost to the vehicle," Mr. Smith said yesterday. "The biggest challenge beyond the technology for these products is actually the experience and the ability to co-ordinate a whole program like that."

Among parts suppliers, Magna has enormous resources to perform the research and development, Mr. Smith said, but the big auto makers have even larger resources and more experience in trying to develop such cutting-edge vehicles.

MAGNA (MG.A)

Close: $76.61, up 61¢

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