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Daily Newsletter

09 August 2023

Daily Newsletter

Magna raises sales and profit outlook

As OEMs ramp up production as supply shortages ease, major suppliers feel the benefit, too

Magna International has raised its full-year profit and sales outlook after a posting a positive set of quarterly financial results.

Magna said that sales increased 17% to $11.0 billion. Adjusted EBIT increased to $603 million in the second quarter of 2023 compared to $358 million in the second quarter of 2022.

Swamy Kotagiri, Magna’s Chief Executive Officer, said: “I am pleased with our second quarter operating performance, which reflects continued strong execution on higher organic sales and cost reduction actions being taken across the company. We remain highly focused on executing our strategy and remain confident in our ability to meet our short- and long-term growth and margin outlooks.

“With the closing of the Veoneer Active Safety acquisition, we have hit the ground running on integration plans and delivering synergies from the combined business.”

Magna said it now expects total sales in 2023 at $41.9bn-$43.5bn compared with previous $40.2bn-$41.8bn. Net income is expected at $1.4bn-$1.6bn compared with previous $1.3-$1.5bn.

AI is a key part of the digital revolution shaping the automotive sector

GlobalData estimates the total AI market will be worth $909 billion in 2030, having grown at a CAGR of 35% between 2022 and 2030. The automotive sector is undergoing a digital transformation fuelled by changing global supply-chain dynamics, tighter market competition, and rising inflation. AI is a key part of this digital revolution. Focus is directed toward driver assistance features for safety and hazard detection and greater automation of many vehicle processes and functions. Simultaneous localization and mapping (SLAM), facial recognition, and motion tracking will be vital for developing incockpit safety features such as early driver fatigue detection. For the most part, the automotive sector will not play a significant role in creating and developing generative AI hardware or platforms. Instead, it will be a key driver for innovations in machine learning platforms and associated IoT hardware for autonomous driving and ADAS. This will also help to drive advances and greater scale-up of adoption of these AI technologies in adjacent sectors such as travel and tourism and construction.