Magna International Inc - Company Strategy & Performance Analysis
Magna International Inc. (Magna International) is one of the world’s leading global automotive suppliers. It is involved in the development and manufacturing of automotive systems, assemblies, modules and components. These products are primarily sold to the original equipment manufacturers of cars and light trucks. Magna undertakes the design, engineering, testing and manufacturing of automotive, seating, closure, body and chassis, vision, electronic, exterior, powertrain, roof, hybrid and electric vehicles/systems, and complete vehicle engineering and contract manufacturing. The company operates through its manufacturing, product development, engineering and sales centers across the Asian, European, North and South American regions. Magna is headquartered in Aurora, Ontario, Canada.
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Europe recorded an increase in revenue
European revenue increased by 16.4%, from US$12.8bn in 2016 to US$14.9bn in 2017. The region’s revenue increased by 17.4% during 2015-2016 due in part to the launch of the Audi A4, Audi A3 and A3 Sportback, Skoda Superb, Mercedes-Benz E-Class, and BMW X1, partially offsetting a loss of US$146.0m due to the weakening of foreign currencies against the US dollar, including the British pound, Russian ruble, Turkish lira, and the euro. Lower production volumes on the MINI Countryman and Paceman negatively affected revenue.
Rest of world segment recorded an increase in revenue
The rest of the world’s revenue rose by 25.6%, from US$464.0m in 2016 to US$583.0m in 2017 and increased by 0.7% during 2015-2016. This was mainly due to net customer prices and the launch of new programs in Brazil, partially offsetting it from a loss of US$67.0m due to the weakening of foreign currencies against the US dollar, including the Argentine peso and Brazilian real.
Launch of new programs led to an increase in segmental revenue
North America’s revenue rose by 0.8%, from US$20.7bn in 2016 to US$20.8bn in 2017 due in part to an increase in revenue from Canada and Mexico. The increase was driven by the launch of the Chrysler Pacifica, Ford Edge and Lincoln MKX, Ford F-Series Superduty, Chevrolet Malibu, Cadillac XT5, and Lincoln Continental. The acquisition of GETRAG during Q1 FY2016 also resulted in a production sales growth of US$593m, partially offsetting it from the loss of US$225.0m due to the weakening of foreign currencies against the US dollar, including the Canadian dollar.