Newspaper article The Canadian Press

Magna Projects Record Year of Sales on Improved North American Production: Magna Projects Record Year of Sales

Newspaper article The Canadian Press

Magna Projects Record Year of Sales on Improved North American Production: Magna Projects Record Year of Sales

Article excerpt

Magna International Inc. (TSX:MG) is so optimistic about an improving trend in the global auto industry that it has boosted its 2012 outlook to project a record year of sales for its auto parts business.

Canada's largest auto parts maker, which keeps its books in U.S. dollars, said Thursday that it now expects to book between US$29 billion and $30.5 billion in sales this year.

"At the low end of this range, this would represent a record year for sales for Magna," chief financial officer Vincent Galifi told analysts on a conference call after the company's annual meeting.

Magna, based in Aurora, Ont., also increased its outlook for North American vehicle production after strong growth in car and truck production helped buoy first-quarter sales and profits that soared past analysts' expectations.

The new guidance range is up from February's sales projection of between $28 billion and $29.5 billion. Magna's new outlook foresees North American vehicle production growing to 14.4 million units from 13.8 million in the February outlook, but it also believes European sales will be lower, around 12.7 million, down from 13 million in its February outlook.

Many automakers have been reporting rising sales of cars and trucks in the opening months of 2012 and it is expected that Detroit's big three could face a supply deficit as demand returns. The companies closed factories and scaled back production to deal with a global downturn in demand during the financial crisis.

Ford recently added extra weeks of production to keep pace with demand and others could soon follow. That's good news for auto parts makers like Magna, which provides automakers with everything from engines to upholstery.

Magna's optimistic guidance was accompanied by the announcement of an ambitious global growth plan that includes building 30 new plants over the next three years in North America, South America, Europe and Asia.

"We are investing in these start ups to drive future growth and to continue to strengthen our global footprint," said CEO Don Walker.

Magna further announced that is has a new deal that will see its Magna Steyr subsidiary assemble a new entry-level Infiniti compact vehicle for Nissan starting in 2014. …

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