The automotive industry in Austria 

The automotive industry is one of Austria’s most important industrial sectors. Although the country does not have its own major passenger car brands, it is a highly specialized location for premium production, engine manufacturing, drive components, e-mobility, engineering services, and automotive IT .
Austria is internationally renowned for quality, precision, and flexible small-batch production , making it attractive to European and international OEMs.

1. Structure & Importance of the Industry

Vehicle production

Austria has two key production sites that strongly influence the industry:

MAGNA STEYR (Graz)

• • The most important automobile production site in Austria.

  • Specializing in contract manufacturing for premium and niche vehicles.

  • Models and segments (depending on the project cycle):

    • Premium SUVs

    • Electric vehicles

    • Special and small series vehicles

  • Magna Steyr is known for high flexibility, prototype construction and complex manufacturing.

BMW engine plant Steyr

• • The largest engine plant within the global BMW Group.

  • Produces millions of units of combustion engines annually and increasingly electric drive modules .

  • A major employer and technology developer in the Upper Austria region.

supplier industry

The Austrian supplier landscape comprises over 900 companies , many of them highly specialized and globally networked. The most important segments are:

• • Drive Technology & Powertrain

  • Metal and lightweight components

  • Chassis and steering systems

  • Automotive Electronics & Sensors

  • Interior and plastics technology

  • E-mobility components (inverters, battery technology, cooling)

Notable players include:

• • AVL List (Graz, world leader in powertrain development & test systems)

  • TTTech Auto (Vienna, software & autonomous driving)

  • Miba (Laakirchen, engine and drive components)

  • ZKW Group (Wieselburg, premium lighting technology)

These companies are positioning Austria as a high-tech location for the European automotive industry .

Automotive Engineering & Software

Austria is a European center for:

• • Powertrain development (ICE & EV)

  • Battery systems & thermal management

  • Simulation & Testing

  • Autonomous and connected driving

  • Safety software and E/E architectures

Regions such as Graz, Vienna and Linz have established themselves as automotive engineering hubs.

2. Economic Importance & Labor Market

• Approximately 80,000 people are employed directly in the automotive industry.

• The industry generates approximately 4% of Austria’s GDP .

• It is one of the country’s most important export sectors, with a strong focus on Germany, CEE countries and Southern Europe.

• Austria is not a mass-market location, but specializes in premium products, innovation and engineering .

3. Challenges of Transformation

Internal combustion engines & EU 2035 phase-out

Austria’s automotive industry is heavily dependent on:

• • Engine production (BMW Steyr),

  • high-precision combustion engine components,

  • classic powertrain suppliers.

The EU ban on combustion engines therefore poses a structural risk:

• • Decline in demand for combustion engines,

  • declining order volumes in the classic powertrain sector,

  • necessary retraining of large parts of the workforce.

Cost pressure & global competition

• • Rising energy prices (especially compared to other European countries),

  • high proportion of labor costs

  • Competition from CEE countries with lower production costs.

Dependence on Magna & BMW

The strong focus on just two major players creates:

• • high risk during model changes,

  • Dependence on corporate decisions,

  • Strong fluctuations in employment and investment.

4. Opportunities & Future Prospects

Electromobility & new drive concepts

Austria invests heavily in:

• • Electric motor development,

  • Power electronics

  • Battery components,

  • Test and testing benches.

Thanks to companies like AVL, the country is one of Europe’s leading innovation locations for new mobility concepts.

Autonomous & Connected Mobility

Software expertise — including that provided by TTTech Auto — is in demand internationally, especially for:

• • System architectures for autonomous driving,

  • Safety protocols and real-time communication,

  • Networked mobility systems.

Green Technologies & Lightweighting

With a high density of mechanical engineering and materials companies, Austria has advantages in:

• • sustainable production processes,

  • Lightweight construction (aluminum, magnesium, composite materials),

  • energy-efficient manufacturing methods.

Premium contract manufacturing

Magna Steyr is a global benchmark for:

• • complex prototype manufacturing,

  • Small series,

  • Premium electric vehicles.

This remains a strategic advantage over mass production sites.

5. Political & economic framework

The Austrian government supports the industry through:

• Funding programs for e-mobility research,

• Cluster initiatives such as the ACstyria Mobility Cluster ,

• tax incentives for innovation,

• Investments in skilled worker training & green industry,

• Expansion of the charging and energy infrastructure.

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6. Outlook 2025–2030

The most important trends of the next few years:

Increasing importance of electric drives

BMW Steyr will increasingly focus its production and development on e-powertrains.

Contract manufacturing for electric vehicles

Magna Steyr remains a key player for OEMs without their own e-production capacities.

Strong role in research & development

Austria will strengthen its position as a European center for:

• • Vehicle development,

  • Powertrain testing,

  • 
    Consolidate automotive software .

Restructuring of the supplier landscape

Many companies need to expand their product portfolio to include electrification and software.

Competition for skilled workers

Engineers, software developers and mechatronics engineers are becoming increasingly scarce.

Our conclusion:

The Austrian automotive industry is small but highly innovative , characterized by premium manufacturing, engineering expertise, and globally leading technology companies. The transformation towards electromobility presents major challenges but also offers opportunities for those companies that invest in new technologies early on. Austria can further expand its position as an international high-tech location—provided the industry actively shapes the transformation in a highly innovative and sustainable way.