Magna has revised down its 2021 sales outlook to reflect a deteriorating outlook for light vehicle production in North America and Europe.
The company said it has updated its 2021 outlook to reflect declines in anticipated 2021 light vehicle production, including 7% and 9% in North America and Europe, respectively, in each case relative to expected light vehicle production levels projected in August.
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Magna said the lower expected light vehicle production is mainly due to the impacts of ongoing semiconductor chip shortages and the COVID-19 pandemic on the global automotive supply chain.
As a result of the lower assumed light vehicle production Magna now expects total sales for 2021 to be in the range of $35.4 to $36.4 billion, compared to $38.0 to $39.5 billion in our August outlook. Adjusted EBIT Margin is now expected to be in the 5.1% to 5.4% range, compared to 7.0% to 7.4% in its August outlook primarily as a result of the decline in expected total sales.
It also said there were ongoing operational inefficiencies driven by unpredictable OEM production schedules, increased production costs, higher commodity costs and a provision on engineering service contracts with Evergrande.
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