Canadian Car Parts Maker Testing Electric-Compressed Natural Gas Hybrid

Ontario, Canada (AHN) - North America's largest auto parts firm will manufacture a plug-in hybrid car slate to roll out in 2009 or 2010.

Frank Stronach, founder of Magna International based in Aurora, Ontario, said the company is taking advantage of international efforts to seek environment friendly solutions for the automotive industry and address as well concerns of soaring oil prices.

Stronach told the Globe and Mail its hybrid engines are already undergoing tests in Europe. The Magna prototype would run on electricity produced by batteries, while current hybrids operate mainly on gasoline supplemented by electric power from brakes and batteries. He added the company is also coming up with another model that would run on compressed natural gas.

Magna set aside an initial fund of $30 million to develop the hybrids. Stronach pointed out the company would not compete with major car manufacturers which it supplies with parts because it would only build auto parts on contract basis for its clients or produce models using its own brand in markets where its clients do not market.

Last week Magna purchased a facility in Alabama that would produce different car models, including the Mercedes Benz.