VW signs deal with Magna-Steyr to develop the Scout SUV and pickup

In May 2022, when Volkswagen confirmed the return of the Scout brand, the automaker said Scouts "will be designed, engineered, and manufactured in the U.S. for American customers." Something happened on the way to development and engineering, because five months later, German outlet Automobilwoche reported VW was in talks with Magna International about Magna "managing the comeback of the Scout brand." The report only mentioned Magna developing the battery-electric pickup and SUV due in 2026, the question being whether VW would stick with its plan to build the Scout in the U.S. Austrian outlet Kleine Zeitung (translated) cited unnamed sources to say the development deal is complete, Magna's Austrian outpost Magna-Steyr having agreed to its largest-ever deal worth 450 million euros ($492M U.S.) to get the two new Scouts ready for production in three years.

That leaves production for us, at least. The arrangement doesn't include manufacturing, KZ writing, "Originally, Magna was also supposed to take over assembly in the USA. Nothing came of it. Now Volkswagen will build the Scout itself and is building a new production facility in Columbia, South Carolina." That refers to the $2B facility in Blythewood, SC, about 100 miles southeast of BMW's Spartanburg plant complex. The state gave VW an incentive package worth $1.3 billion, the arrangement including a proviso that VW would repay the state $790 million if the automaker "doesn’t meet or maintain certain job and investment commitments."

Magna's worked up a decent knowledge bank about ICE-powered and EV truck challenges, too. It builds the ICE-powered G-Class and will build the battery-powered EQG. It assembles the electric Jaguar I-Pace, helped develop the FM29 platform the Fisker Ocean sits on, and has already signed a contract to engineer and build the battery-electric version of the Ineos Grenadier. 

Splitting development and production isn't new, Magna having worked with Ineos Automotive to create the Grenadier pickup that Ineos builds at its own factory in Hambach, France. Before that, Magna worked on development of the Audi TT that Audi built in Hungary, among other places. Since one of the Scouts is a pickup, U.S. assembly makes the most sense to us on the face of it because VW needs to avoid America's 25% Chicken Tax on imported pickups and cargo vans — a hurdle we're still not sure how Ineos plans to avoid, considering where Ineos currently builds its Grenadier Quartermaster pickup. The U.S. plant is also expected to serve other VW Group brands, specifically Audi, which could use it to build an electric Range Rover or Mercedes-Benz G-Class competitor on the new electric platform being created for the Scout; Audi has repeatedly been tabbed as the Scout division's technology supplier.

Last we heard, the Scout is still planned to launch with a $40,000 SUV first, followed by a pickup said to be about the size of a Ford F-150. The image above is a brightened version of the most recent teaser from late last year. It's still up on the Scout Motors site, but Scout hired Chris Benjamin as head of design in May of this year, so everything could have changed. Benjamin's 25 years in the auto business includes six years at Fiat Chrysler/Stellantis overseeing interior design for Chrysler, Dodge, Jeep, and Ram.