Magna International Business Report FY2008
|Financial Overview||(in million dollars)|
|FY2008||FY2007||Rate of change (%)||Factors|
|Sales by Segment|
|External Production North America||10,938||12,977||(16)||2)|
|External Production Europe||7,089||6,936||2||3)|
|External Production Rest of World||515||411||25||4)|
|Complete Vehicle Assembly||3,306||4,008||(18)||-|
|Tooling, Engineering and Other||1,856||1,735||7||-|
Sales - Overall
-This lower sales level was a result of decreases in its North American production sales and complete vehicle assembly sales, offset in part by increases in its European and Rest of World production sales and tooling, engineering and other sales.
-North American average dollar content per vehicle increased 1%, while vehicle production declined 16%;
-European average dollar content per vehicle increased 12%, while vehicle production declined 8%; and
-Complete vehicle assembly sales decreased 18% to$3.3 billion from $4.0 billion and complete vehicle assembly volumes declined 37% to approximately 125 thousand units.
External Production North America
-This decrease in production sales reflects a 16% decrease in North American vehicle production volumes partially offset by a 1% increase in its North American average dollar content per vehicle.
-During 2008 its largest customers in North America continued to reduce vehicle production volumes compared to 2007.
-While North American vehicle production volumes declined 16% in 2008 compared to 2007, Chrysler, Ford and GM vehicle production declined 25%, 21% and 19%, respectively.
-The Company's average dollar content per vehicle grew by 1% or $8 to $867 for 2008 compared to $859 for 2007, primarily as a result of:
1) The launch of new programs during or subsequent to 2007, including:
-The Dodge Journey
-The Dodge Grand Caravan, Chrysler Town & Country and Volkswagen Routan
-The Buick Enclave and Chevrolet Traverse
-The Ford Flex
-The Mazda 6
2) Acquisitions completed subsequent to 2007, including:
-A substantial portion of Plastech Engineered Products Inc.'s exteriors business
-A stamping and sub-assembly facility in Birmingham, Alabama from Ogihara America Corporation
3) Increased production and/or content on certain programs, including the Chevrolet Cobalt and Pontiac G5
4) An increase in reported U.S. dollar sales due to the strengthening of the Canadian dollar against the U.S. dollar.
External Production Europe
-This increase in production sales reflects a 12% increase in its European average dollar content per vehicle partially offset by an 8% decrease in European vehicle production volumes.
-The Company's average dollar content per vehicle grew by 12% or $51 to $486 for 2008 compared to $435 for 2007, primarily as a result of:
1) The launch of new programs during or subsequent to 2007, including:
-The Volkswagen Tiguan
-The MINI Clubman
2) An increase in reported U.S. dollar sales primarily due to the strengthening of the euro against the U.S. dollar
3) Increased production and/or content on certain programs, including:
-The Mercedes-Benz C-Class
-The Volkswagen Transporter
-The smart fortwo
-These factors were partially offset by:
1) The impact of lower production and/or content on certain programs, including:
-The BMW X3
-The MINI Cooper
2) The sale of certain facilities during or subsequent to 2007
3) Programs that ended production during or subsequent to 2007, including the Chrysler Voyager
4) Incremental customer price concessions.
External Production Rest of World
-The increase in production sales is primarily as a result of:
1) The launch of new programs in South Africa and China during or subsequent to 2007
2) Increased production and/or content on certain programs in China and Brazil
3) An increase in reported U.S. dollar sales as a result of the strengthening of the Brazilian real and Chinese Renminbi, each against the U.S. dollar.
-These factors were partially offset by a decrease in reported U.S. dollar sales as a result of the weakening of the Korean Won against the U.S. dollar.
Allied Transportation Technology, Inc.
-In Feb. 2008, the Company announced that Magna Electronics Inc., the Company's operating unit of electronics products, has acquired Allied Transportation Technology, Inc. (Michigan, U.S.A.), which produces automotive sensing devices such as obstacle detection systems. The acquisition will allow the Company to reinforce its development capabilities in the area of driver assistance systems. Magna Electronics manufactures a range of electronics products such as electronics controllers. Allied supplies mainly ultrasonic sensing systems that are used for parking assistance and back-up object detection. (From an article in the Nikkan Jidosha Shimbun on Feb. 26, 2008)
Ogihara America Corporation
-In Apr. 2008, the Company announced that its operating unit, Cosma International Inc. has signed an agreement with Ogihara America Corporation pursuant to which Cosma will acquire Ogihara's stamping and sub-assembly plant. Upon completion of the transaction, Cosmo will manufacture and supply structural welded assembles to automakers in Southeastern part of the U.S. including Mercedes-Benz. (From an article in the Nikkan Jidosha Shimbun on Apr. 25, 2008)
Exterior Business of Plastech Engineered Products Inc.
-On June 16, 2008, the Company acquired a substantial portion of the exteriors business and related assets from Plastech Engineered Products Inc., in a Chapter 11 sale out of bankruptcy. The acquired business supplies parts to various customers, including Chrysler, Ford and General Motors, in the United States and Canada.
-On October 3, 2008, the Company acquired BluWav Systems LLC, a developer and supplier of electric and energy management systems for hybrid electric vehicles, plug-in hybrid vehicles and battery electric vehicles.
Zhangjiagang Suxing Electronics
-In Feb. 2008, the Company announced acquisition of the Zhangjiagang Suxing Electronics facility located in the Jiangsu province, China by Magna Electronics Inc., an electronics production unit of the Company. This is the Company's first electronics product manufacturing facility in Asia and its products will include body control modules. The facility will be renamed Magna Suxing Electronics.(From an article in the Nikkan Jidosha Shimbun on Feb. 28, 2008)
-In Aug. 2008, The Compay announced the acquisition of Technoplast, a supplier of plastic exterior and interior components in Russia. Technoplast, which had sales of approximately 29 million Euro in 2007, currently supplies components for several programs for GAZ Group, including the new Volga Siber program. (From a press release on Aug 1, 2008)
-Following restructuring took place in 2008
1) The consolidation of interiors and exteriors operations in Canada and the United States;
2) The closure of a seating systems facility in St. Louis
3) The consolidation of closure systems operations in Canada
4) The consolidation of the powertrain die casting operations in Canada and the United States.
-The Company has historically emphasized technology development and has a policy, embodied in its Corporate Constitution, to allocate a minimum of 7% of its Pre-Tax Profits (as defined in the Corporate Constitution) for each financial year to research and development during that financial year or the next succeeding financial year.
New R&D Center
-In 2008, the Company opened an engineering and development centre in Changchun, China.
-In 2008, the Company announced a partnership with Ford Motor to bring a zero-emission, lithium-ion battery electric vehicle to the market in 2011. The compact car will be a key vehicle in Ford's electrification strategy. The Company will be responsible for providing critical components for the vehicle, and will also play a key role in the engineering required to integrate the electric propulsion system and other new systems into the vehicle architecture.
Technologies for Electric Vehicles
-In Nov. 2008, the Company has decided to make full efforts on technology development for electric vehicles (EVs) to establish a build-to-order and parts supply business for EVs. While taking advantage of its divisional operation structure consisting of divisions for most vehicle parts from auto body parts, powertrain systems through electronics systems, the Company will integrate units developed separately by each division into a vehicle to make proposals on its latest EV technologies. As early as 2011 the Company will reveal its technological achievements to meet the new needs. It has recently acquired BluWav Systems LLC, Michigan, U.S.A., a developer and supplier of electric and energy-management systems for hybrid and electric vehicles, and steadily strengthens its foundation to enhance development capabilities for hybrid and electric vehicle systems. (From an article in the Nikkan Jidosha Shimbun on Nov. 6, 2008)
|Capital Expenditure||(in million dollars)|
Investments outside Canada
-In Oct. 2008, Cosma International, an operating unit of the Company and an automotive body and chassis systems supplier, announced the establishment of a new facility in Pune, India. With the addition of this facility Cosma now has two operations in India - the other being an engineering services group in Bangalore. The Pune plant will start operations in 2010. The facility will supply global customers as well as regional customers. (From a press release on Oct 15, 2008)
-In Oct. 2008, Cosma International, an operating unit of the Company and an automotive body and chassis systems supplier, announced the opening of a new facility in Shanghai, China. This new facility replaces Cosma's Anting plant. The facility supplies a major automaker in China with body and chassis products. (From a press release on Oct 20, 2008)