MAGNA
Tier 1 ready for the next consolidation round / New strategic alignment should fuel growth
Automotive supplier Magna International (Aurora, Ontario / Canada; www.magnaint.com), which has grown strongly over the past ten years, intends to stay at the forefront in the industry´s ongoing consolidation process. With sales of some USD 20.5 bn, the group built up by the Austro-Canadian multi-billionaire Frank Stronach regards itself as the world´s sixth largest car supplier, with 219 production facilities worldwide, including 81 in Europe, and 49 development centres. Europe, a clear focus, accounts for 23 of the latter.
Magna covers almost the entire automotive spectrum. Subsidiary Intier manufactures interior parts of plastic, while Decoma produces exteriors. Magna Donnelly, specialised in mirrors, is also very much involved in plastics. Another Magna company, Tesma, focuses on powertrains. Cosma concentrates on metal forming, Magna Steyr on assembly and Magna Drivetrain on drivetrains.
To pool its products more effectively, Magna is now adopting a “privatisation strategy.” Companies in which it holds a majority, but also have many minority shareholders, such as Decoma (Concord, Ontario; www.decoma.com) – see PIE 03, 2005 – are to be fully integrated. In future, the Canadian group wants to offer more complete modules rather than individual parts. The aim is to lower costs and capture a part of the market that is constantly expanding through increased OEM outsourcing. In powertrains and drivetrains alone, Magna expects the market to be worth well over USD 200 bn in 2015.
Broadening the customer base is also a prerequisite for success. With Asian OEM transplants in North America and Europe (in particular, France), the company feels it has a great deal of catching up to do. But it has already made a firm start in this direction, having won orders from Honda, Nissan, Mazda, Hyundai, PSA and Renault. Magna naturally also wants to serve the growth markets in China, southeast Asia and central and eastern Europe, where the highest automotive growth rates are forecast. It already has nine production plants in the expanding countries of eastern Europe.
• e-Service:Very detailed presentation of Magna´s strategy from 2005 to 2007 (PDF) as PDF document (4.323 KB)
Magna covers almost the entire automotive spectrum. Subsidiary Intier manufactures interior parts of plastic, while Decoma produces exteriors. Magna Donnelly, specialised in mirrors, is also very much involved in plastics. Another Magna company, Tesma, focuses on powertrains. Cosma concentrates on metal forming, Magna Steyr on assembly and Magna Drivetrain on drivetrains.
To pool its products more effectively, Magna is now adopting a “privatisation strategy.” Companies in which it holds a majority, but also have many minority shareholders, such as Decoma (Concord, Ontario; www.decoma.com) – see PIE 03, 2005 – are to be fully integrated. In future, the Canadian group wants to offer more complete modules rather than individual parts. The aim is to lower costs and capture a part of the market that is constantly expanding through increased OEM outsourcing. In powertrains and drivetrains alone, Magna expects the market to be worth well over USD 200 bn in 2015.
Broadening the customer base is also a prerequisite for success. With Asian OEM transplants in North America and Europe (in particular, France), the company feels it has a great deal of catching up to do. But it has already made a firm start in this direction, having won orders from Honda, Nissan, Mazda, Hyundai, PSA and Renault. Magna naturally also wants to serve the growth markets in China, southeast Asia and central and eastern Europe, where the highest automotive growth rates are forecast. It already has nine production plants in the expanding countries of eastern Europe.
• e-Service:Very detailed presentation of Magna´s strategy from 2005 to 2007 (PDF) as PDF document (4.323 KB)
24.02.2005 Plasteurope.com [202132]
Published on 24.02.2005