Magna International Inc. Business Report FY ended Dec. 2016

Financial Overview

(in million USD)
FY ended Dec. 31, 2016 FY ended Dec. 31, 2015 Rate of change
Net Sales 36,445 32,134 13.4 1)
Operating Income 2,780 2,651 4.9 -
External Production Sales by Region*
North America 19,381 17,759 9.1 2)
Europe 9,140 7,252 26.0 3)
Asia 2,217 1,612 37.5 4)
Rest of World 439 454 (3.3) 5)

*External production sales do not include sales from complete vehicle assembly activities nor tooling, engineering, and other activities.

1) Net Sales
-The Company’s sales in the fiscal year ended December 31, 2016 increased by 13.4% over the previous year to USD 36,445 million. The 13.4% increase in sales is significantly larger than the 4% growth in global light vehicle production in 2016. Sales increased in all of the Company’s operating regions except for the Rest of World region.

2) North America
-External production sales in North America increased by 9.1% in the fiscal year ended December 31, 2016 to USD 19,381 million. The increase in sales resulted primarily from the launch of new programs including the Chrysler Pacifica, Ford F-Series Superduty, Ford Edge, Lincoln MKX, Chevrolet Malibu, Cadillac XT5, and the Lincoln Continental. Sales also benefited from the acquisition of GETRAG in the first quarter of 2016, which increased sales by USD 593 million. These gains were partially offset by programs which ended in 2015, a USD 225 million decrease due to negative currency effects, the contribution of manufacturing facilities into a joint venture, lower production volumes on current programs, and net customer price concessions.

3) Europe
-In the fiscal year ended December 31, 2016, the Company’s external production sales in Europe increased by 26.0% to USD 9,140 million. One factor leading to the increase in sales include acquisitions made during or subsequent to 2015, leading to an increase in sales of USD 1.42 billion, including the acquisition of GETRAG. Another contributing factor was the launch of new programs including the Audi A4, Audi A3, Audi A3 Sportback, Skoda Superb, Mercedes-Benz E-Class, and BMW X1. The gains were partially offset by negative currency effects causing a USD 146 million loss, lower production volumes on existing programs including the MINI Countryman and Paceman, lower production content, and net customer price concessions.

4) Asia
-The Company’s external production sales in Asia increased by 37.5% to USD 2,217 million in the fiscal year ended December 31, 2016. The increase in sales was primarily due to the launch of new programs, specifically in China, as well as acquisitions made during or subsequent to 2015, including a partnership agreement with Chongqing Xingqiaorui and the acquisition of GETRAG. These gains were partially offset by a negative currency effect of USD 119 million and net customer price concessions.

5) Rest of World
-External production sales of the Company’s Rest of World region in the fiscal year ended December 31, 2016 totaled USD 439 million, a decrease of 3.3% from the previous year. The decrease was caused by a USD 67 million loss from negative currency effects as well as lower production volumes on current programs. These losses were partially offset by net customer price increases and the launch of new programs, particularly in Brazil.


-The Company announced that it has signed an agreement to acquire the BOCO Group of Companies, an automotive supplier of latches, hinges and strikers, to help bolster its product portfolio and engineering capabilities. The transaction is expected to close in the fourth quarter of 2016. Once complete, BOCO's two facilities located in Wuppertal, Germany, and Tianjin, China, will be integrated into Magna Closures. BOCO has annual sales of more than EUR 100 million with customers including BMW, Daimler, and Audi. John O'Hara, President, Magna Closures, said, "BOCO's product and processing know-how and engineering strength provides additional global growth opportunities for us going forward, particularly with automakers based in Germany." (From a press release on September 26, 2016)

-In May 2016, the Company acquired Telemotive AG, a leading engineering service provider in automotive electronics. The acquisition expands the Company’s engineering service product portfolio in vehicle connectivity, Human Machine Interface (HMI) and infotainment.

-The Company announced that it has completed its acquisition of the Getrag Group of Companies. With a workforce of approximately 14,000 employees, Getrag offers a range of transmission systems which include manual, automated-manual, dual-clutch, hybrid and other advanced systems. (From a press release on January 4, 2016)

Joint Ventures

-The Company announced that a joint venture between GETRAG and Dongfeng Motor Corp. (Dongfeng Motor), a Chinese firm, has launched production of dual-clutch gearboxes at its plant in Wuhan, China. The 6DCT150 transmission for compact cars was jointly developed by Getrag and Dongfeng Motor. The gear wheels in the 6DCT150 have been made lighter and more compact to achieve better fuel efficiency. The Company intends to increase sales for the gearbox in China where the need for fuel-efficient vehicles is on the rise. (From an article in the Nikkan Jidosha Shimbun on May 11, 2016)

Recent Developments

-On October 27, 2016, the Company held a ceremony in Nanchang, China to celebrate the production launch of the third-generation dual-clutch transmission 7DCT300, and the 10th anniversary of GETRAG (Jiangxi) Transmission Co., Ltd., its joint venture with Jiangling Motors. 7DCT300 was designed for mid-sized and compact passenger cars with a maximum torque of up to 300 Nm. It is suitable for all-wheel-drive vehicles and vehicles with fuel saving features like start-stop and coasting functions. The Company was awarded the Prix de l'innovation Renault-Nissan for this technology in 2015. (From a press release on November 4, 2016)


-The Company announced its EYERIS vision-based driver-assistance technologies are featured in the 2017 Ford Super Duty Trailer Reverse Guidance system. The Company’s back-up driver assistance systems that create a 360-degree view for the driver are already used in the F-Series. (From a press release on October 26, 2016)

-The Company announced that it is supplying front and rear fascias for the 2017 Chevrolet Camaro ZL1. The fascias are manufactured at the Company’s DexSys manufacturing division in Delta Township, Michigan, U.S. (From a press release on October 5, 2016)

-The Company has equipped the new Ford S-MAX Vignale with the EYERIS electronic vision system, while GETRAG provided the six-gear manual and six-gear dual clutch transmissions for the S-MAX Vignale. The transmission was produced by the Getrag Ford Transmissions joint venture. (From a press release on September 6, 2016)

-The Company announced that it has produced five million Actimax transfer cases for BMW Group. The Company has been providing BMW with drive systems since 2003, including the Actimax transfer case, which powers the dynamic, fuel-saving all-wheel-drive in nearly all BMW xDrive models and is manufactured in Ilz and Lannach, Austria, and Ramos Arizpe, Mexico. (From a press release on June 23, 2016)

-The Company announced that it has developed a new Stow'n Go Seating and Storage System for FCA US’s all-new 2017 Chrysler Pacifica. Other Company content on the new Pacifica includes body and chassis systems, powertrain components, exterior parts (rocker panels and spoiler), closure systems (side door modules, handles and latches), outside mirrors, and electronic driver-assistance systems. (From a press release on May 10, 2016)

-The Company announced that it is supplying its new EYERIS Generation 3.0 camera system for the 2016 Jeep Grand Cherokee and the all-new 2017 Chrysler Pacifica. The EYERIS Generation 3.0 system builds on the innovative technology features from previous platforms and improves the field of view and the camera resolution. As part of a fusion system with the vehicle’s radar, EYERIS performs functions related to the vehicles' lane keeping, automatic high beam, automatic emergency braking and adaptive cruise control features. (From a press release on March 9, 2016)

-The Company announced that its rear view camera and image processing technologies are featured in the 2016 Ford F-150 Pro Trailer Backup Assist system. Ford's Pro Trailer Backup Assist system allows a driver to safely back-up a trailer with an automated system in which the driver steers the trailer using a control knob, while the truck steers its own wheels. (From a press release on January 6, 2016)


-GRA-MAG, a joint venture between the Company and Grammer AG, received the 2016 Supplier Performance Management (SPM) Achiever award from PACCAR. GRA-MAG offers best-in-class comfort, ease of use and overall performance for air ride suspensions and stationary truck seats. (From a press release on December 14, 2016)

-The Company announced that its electronics manufacturing division in Holly, Michigan, U.S., has received the Honda Supplier Performance Recognition Award. With approximately 529 employees, Magna Electronics Holly manufactures front- and rearview cameras for several automakers including Honda, Ford, Jaguar and Toyota. (From a press release on July 6, 2016)

-The Company announced that four of its manufacturing divisions in China received the General Motors Supplier Quality Excellence Award. The divisions receiving the award are Magna Electronics Zhangjiagang, Magna Closures Kunshan and Hefei, and Magna Mirrors Jinshan. (From a press release on July 6, 2016)

-The Company announced it has received a 2016 Ford World Excellence Award in the "Smart" category for the innovative technology featured in the 2016 Ford F-150 Pro Trailer Backup Assist system. Ford's system is enabled by the Company's rear view camera and its image processing algorithm. (From a press release on June 14, 2016)

-The Company announced that its manufacturing division in Liberec, Czech Republic, has received the 2016 PSA Best Plant Award for its performance in manufacturing, quality and efficiency. With approximately 1,200 employees, the Bohemia plant in Liberec manufactures a wide range of exterior components including bumpers, rocker and instrument panels, armrests, glove boxes, center consoles and tailgates for BMW and Volkswagen. (From a press release on June 8, 2016)

-The Company announced that its manufacturing division in Sao Paulo, Brazil, has received the 2015 Honda Brazil Supplier Award for its performance in both the Quality and Delivery categories. The division supplies Honda with interior door handles. (From a press release on June 8, 2016)

-The Company announced that it has received the Good Supplier Award from Honda Motor Company in the Cost Performance category for its rearview cameras. Magna supplies rearview cameras on several Honda vehicles including the Accord, CR-V, Fit/Jazz, City/Grace, HR-V/Vezel, ILX and RDX. (From a press release on April 12, 2016)

-The Company received a Special Recognition Award from Toyota Motor Corporation for supplying various components including mirrors, glass, weatherstrips, grilles and ornamentation for the 2016 Toyota Tacoma. (From a press release on March 16, 2016)

-General Motors recognized the Company as a 2015 Supplier of the Year award winner. (From a press release on March 10, 2016)

-The Company announced that its electronics manufacturing division in Zhangjiagang, Jiangsu Province, China, has received Honda Motor’s (China) Excellent Supplier Award for product excellence and quality. Magna Electronics Zhangjiagang has approximately 130 employees and supplies cameras for driver assistance systems as well as various vehicle electronic components for several automakers including Honda, Ford, Fiat, Geely and Great Wall. (From a press release on February 9, 2016)

R&D Expenditure

-The Company's Corporate Constitution requires a minimum of 7% of its pre-tax profits for any fiscal year to be allocated to research and development during that fiscal year or the fiscal year that immediately follows.

R&D Facilities

-The Company announced that it will establish a new seating engineering center in the Xuhui District of Shanghai, China. The new location, which will include a seating testing lab and prototype shop, will initially employ approximately 60 people, but is expected to increase employment to more than 100 at full capacity. Mike Bisson, President of Magna Seating, said, "Opening a technical center in China is a reinforcement of our commitment to our customers as they are looking for innovation and technology breakthroughs in the local market." (From a press release on January 25, 2016)

Technological Alliance

Partnership with Innoviz Technologies for lidar solutions
-The Company and Innoviz Technologies announced a partnership to deliver LiDAR remote sensing solutions for the implementation of autonomous driving features and full autonomy in future vehicles. The high-definition, solid-state LiDAR enables 3D remote sensing to produce highly accurate real-time images of the vehicle's surroundings while meeting automotive standards and significantly reducing cost and size. In contrast to solutions currently available, the Innoviz LiDAR can be seamlessly integrated into any vehicle and is designed to effectively manage changing light and weather conditions. Innoviz's prototype LiDAR devices will be showcased at the Company’s booth at CES 2017. (From a press release on December 20, 2016)

Product development

Products highlighted at CES 2017 through Microsoft HoloLens mixed-reality device
-The Company will demonstrate its future mobility capabilities during CES 2017 with Microsoft's HoloLens mixed-reality experience and ADAS simulator. The self-contained, holographic computer will demonstrate unique future vehicle technology including:

  • Cameras, sensors, LiDAR, and radar systems that enable autonomous driving
  • Seat sensors that provide continuous feedback to the driver
  • Active aerodynamic fuel efficiency technology
  • Various powertrain architectures from multiple hybrid variants to full electrification

(From a press release on December 14, 2016)

Electric superchargers
-The Company is planning to release its electric superchargers in Europe as early as 2017. Demand for downsized, supercharged engines is expected to grow in the European market, because of stricter CO2 emissions regulations. The Company believes electric superchargers are suitable for mid-sized or larger vehicles, and will enter the market, utilizing its expertise in motor technology. The Company will develop two types of superchargers: a 12V version; and a 48V version for new 48 volt electric architectures, which will be introduced in Europe this year. (From an article in the Nikkan Jidosha Shimbun on March 4, 2016)

Pitch Slide and Tip Slide EZ entry seats
-Both seats are designed to improve vehicle accessibility and space flexibility. Pitch Slide seats are meant for the second-row passenger side of the vehicle, while Tip Slide seats are designed for the second-row driver side of the vehicle. Custom recliners and tracks enable the seats to move forward and shift, enabling easier access to a vehicle’s third row, without having to remove an installed child’s seat. The seats were introduced on 2017 model year vehicles, with the Pitch Slide seat making its market debut on a GMC model.

Ultra All-Wheel Drive system
-The Company partnered with Audi to develop the new Quattro Ultra All-Wheel Drive system. The technology enables an AWD disconnect system that only activates all four wheels when necessary, thus reducing friction and transmission losses. This, in turn, improves fuel efficiency, emissions, driving performance, and stability. The Ultra AWD system was launched on the Audi A4 allroad in 2016.

Ultralight door module
-The Company has collaborated with the U.S. Department of Energy, FCA, and Grupo Antolin to develop an ultralight door architecture. The architecture features the Company’s SmartLatch electronic latch system and significant aluminum use to achieve a 42.5% mass reduction compared to an average production door. The decrease in weight will help reduce emissions and fuel consumption. Future plans include manufacturing full-scale prototypes, testing for performance and safety, and finally production for use in production vehicles.

Eyeris in-cabin child monitoring feature
-The Company developed a video-based child monitoring system based on its Eyeris camera technologies. A digital camera is located over the rear seat to provide a top-down view of rear seat passengers. In dark conditions, an infrared LED light illuminates rear seat passengers. The system was shown on the 2018 Honda Odyssey which debuted at the 2017 North American International Auto Show.

D-optic lighting
-The D-Optic LED headlamps combine multiple high-power LEDs with injection-molded lens to offer high-performance lighting efficiently. D-Optic LED lights provide a 60% improvement in energy consumption versus halogen lights, and a 40% improvement compared to HID lights.

Carbon fiber subframe
-The Company collaborated with Ford to develop a prototype carbon-fiber subframe. The carbon-fiber subframe is 34% lighter than a corresponding subframe from stamped steel. Furthermore, the carbon-fiber subframe simplifies assembly by reducing parts by 87% from a stamped steel frame by replacing 45 steel parts with two molded parts and four metallic parts. Currently, the Company is producing prototype subframes for vehicle-level testing at Ford.

ClearView outside mirror
-The ClearView outside mirror integrates a camera into a traditional mirror to display a larger field of view and improved depth perception compared to traditional mirror systems. Furthermore, ClearView offers additional features such as a self-cleaning camera and customizable overlays, while maintaining traditional mirror features such as integrated turn signals, power folding capabilities, ground illumination, and surround view cameras.

Capital Expenditure

(in million USD)
FY ended Dec. 31, 2016 FY ended Dec. 31, 2015 FY ended Dec. 31, 2014
Overall 1,807 1,591 1,495

Investment outside Canada

-The Company announced that it held a groundbreaking ceremony of its seat manufacturing facility in Spartanburg County, South Carolina. The Company won multiple new seating programs from the BMW Group, which will be supplied from new facility. The plant is expected to begin operations in June 2017 and could employ up to 480 people by 2020. The Company has three manufacturing locations and employs approximately 1,450 people in South Carolina. (From a press release on December 6, 2016)

-The Company announced that it will build a new aluminum casting facility in Telford, United Kingdom, to support Jaguar Land Rover. The new facility is expected to span approximately 225,000 square feet and will create up to 295 jobs at full capacity. Construction is expected to start in fall 2016. Once production begins in 2018, the facility will use the Company's high-pressure vacuum die casting process to produce a number of advanced lightweight aluminum castings. (From a press release on May 25, 2016)

-The Company announced the grand opening of Magna Exteriors Queretaro, a newly constructed facility in Queretaro, Mexico, for manufacturing automotive exterior products. The 290,000-square-foot, state-of-the-art injection molding and robotic paint line facility will employ approximately 600 people and will supply global automakers with molded and painted parts such as fascias, bumpers and rocker panels. (From a press release on May 18, 2016)

-The Company announced that it will open a new seating manufacturing facility in Taizhou, Zhejiang Province, China, to supply Geely's Volvo Car Group. Construction is already underway and is set to be completed by mid-2016. The 5,200-square-meter facility will produce complete seating systems for a small crossover utility vehicle, the first automobile to be produced from Volvo's CMA (Compact Modular Architecture) platform. The new facility is expected to create up to 90 new jobs. (From a press release on March 9, 2016)