Austrian-Canadian auto supplier Magna Steyr will develop the entry model of Nissan Motor Co. Ltd.'s (7201.TO) Infiniti premium brand based on Daimler AG's (DAI.XE) Mercedes A Class, weekly newspaper Automotive News Europe reports Sunday.

Citing several people close to the companies involved, the newspaper also says that Magna's main production facility in Graz, Austria, will get the official production order in early 2012. According to internal plans, it could build 50,000-60,000 of the Infiniti entry model annually for global exports, the newspaper says.

By choosing Magna and Mercedes, Nissan doesn't need to invest in production facilities and saves on development costs, the newspaper reports. Daimler gets licensing fees for each car manufactured and benefits from economies of scale, according to the newspaper.

A Daimler spokeswoman declined to comment to Dow Jones Newswires on the report. Magna Steyr wasn't immediately available to comment.

Newspaper website: http://www.autonews.com

-Frankfurt Bureau, Dow Jones Newswires; 49-69-29725-500.

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