Slovenia says car parts firm Magna may invest up to $1.3 bln

By Marja Novak

LJUBLJANA, March 16 (Reuters) - Car (HKSE: 0699-OL.HK - news) parts maker Magna International has submitted a plan to potentially invest up to 1.24 billion euros ($1.3 billion) in Slovenia and create around 6,000 jobs, the government said on Thursday.

"The final goal is the establishment of an entirely functional car plant in Slovenia with capacity of 100,000 to 200,000 vehicles per year," the government said in a statement.

It said the proposed investment would be in four phases, without giving a timeframe or any indication of when a final investment decision might be made.

Magna said in January it would build a new paint shop in Slovenia, creating around 400 jobs. A spokesman told Reuters on Thursday that investment had been confirmed, but did not comment on the rest of the plan.

The Canadian firm, which makes parts for most of the world's auto makers and also assembles vehicles under contract, said in December it was considering building a new plant in Europe as its Austrian factory runs out of capacity.

Slovenia's centre-left government is eager to attract more foreign investment to reduce unemployment and boost growth.

Data on Thursday showed Slovenia's jobless rate rose to 11.2 percent in January from 10.8 percent the month before.

The government said on Thursday it would provide a total of around 25 million euros of financial support to three industry investment projects, including Magna's.

It awarded 18.6 million euros to Magna and 5.7 million euros to Japanese electrical equipment firm Yaskawa, which is building a new robot factory in the country.

It also announced 580,000 euros for a Slovenian unit of British engineer GKN (Frankfurt: 694194 - news) for a new production line of car parts for Mercedes (Xetra: 710000 - news) and Volvo cars.

($1 = 0.9321 euros) (Reporting by Marja Novak; Editing by Mark Potter)