Auto Service World
News   January 12, 2011   by Auto Service World

Magna Outlook Positive On Growing Vehicle Production


Global auto parts producer Magna International Inc. says that its financial outlook for 2011 is buoyed by rebounding vehicle production.
Don Walker, Magna’s chief executive officer commented: “As 2011 begins, vehicle production is poised for future growth in a number of important markets for us, including North America. Accordingly, our outlook reflects significant sales growth, including expansion in high-growth markets in the next few years. We also have the balance sheet, cash flow generation, engineering and manufacturing footprints, technologies and motivated workforce to support our growth initiatives around the world. These factors combined leave us confident about Magna’s future.”
All amounts are in U.S. dollars.
For the full year 2011, the company expects consolidated total sales to be between $25.6 billion and $27.1 billion, and expect consolidated production sales to be between $21.7 billion and $22.7 billion, based on full year 2011 light vehicle production volumes of approximately 12.9 million units in North America and approximately 13.3 million units in Western Europe. It expects full year 2011 production sales to be between $12.7 billion and $13.2 billion in North America, between $7.8 billion and $8.1 billion in Europe and between $1.2 billion and $1.4 billion in Rest of World. It expects full year 2011 complete vehicle assembly sales to be between $2.4 billion and $2.7 billion and 2011 effective income tax rate to be approximately 20%.
In addition, Magna expects that its full year 2011 spending for fixed assets will be between $900 million and $1.0 billion. This amount reflects continuing investment to support new and replacement business in its traditional markets as well as investment to expand in a number of high-growth markets.
Finally, in addition to its 2011 sales outlook, Magna expects a net increase in total production sales over the two-year period from 2011 to 2013 of approximately $3 billion, based on assumed full year 2013 light vehicle production volumes of approximately 14.8 million units in North America and approximately 14.1 million units in Western Europe. It expects the net increase in total production sales to be split approximately equally among our North America, Europe and Rest of World segments.
In this 2011 outlook, in addition to 2011 and 2013 light vehicle production, Magna has assumed no material acquisitions or divestitures will take place and that foreign exchange rates for the most common currencies in which it conducts business relative to U.S. dollar reporting currency will approximate year-end 2010 rates.

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