DETROIT (Reuters) -China's Guangzhou Automobile Group (GAC) will build its electric AION V model at a Magna facility in Austria, the two companies said on Thursday, a strategy that should help GAC avoid the EU's tariffs on China-made EVs.

The GAC vehicle will be produced at Magna's facility in Graz, Austria, which can make gasoline-powered, hybrid and electric vehicles on shared lines.

Last year, the EU introduced provisional tariffs of up to 37.6% on China-made EVs, describing their imports as a potential flood of unfairly subsidized EVs.

"Europe is a vital market in GAC's global development," said Wei Haigang, president of GAC International. 

Roland Prettner, president of the Magna Steyr contract manufacturing business, said its expertise will allow automakers like GAC to localize production efficiently.

The GAC deal comes after Magna said in September it would build battery-powered models for XPeng ( XPEV ) at the same Graz facility.