38 | AutoPartsAsia | FEBRUARY 2018SPECIAL REPORT
M
agna International Inc., a
leading global automotive
supplier, which has 328
manufacturing plants and
99 product development, engineering
and sales centres in 29 countries,
is setting up on an average 10 new
plants a year, mostly in Asia. With its
vision to be the customers’ preferred
global supplier partner for the
automotive industry, it will continue
building new plants up to 2020.
“Asia, especially China is the main
driver; we are almost doubling our
growth there in the next couple
of years. In North America we are
already twice the size of our nearest
competitor, so it is difficult to grow
there. Europe is improving a bit,
Russia can improve dramatically to
give us high growth rate potential; in
South America we shrank, so growth
will take us back to what we were
with the markets there. Asia is the
key,” Frank O’Brien, Executive Vice
President, Asia, Magna International
Inc., told AutoParts Asia.
“The trends in the industry have been
for stuff from the northern parts of the
US to move to the southern part and
Mexico. In projections for car builds,
Asia is taking up most of the growth
for the next 10 years with structural
changes in Europe continuing to
move east. People
ask me how much
are we importing
from China and
the answer is very
little because our
components are
big enough that
they have to be
located close to
the customer,” he
said.
Magna considers
Africa as a
significant market
for the long-
term.“Our present
priorities have
Asia at the top as
well as supporting
our traditional
customers as theychange their manufacturing footprint.
We have some projects in Northern
Africa; Africa is going to start from
the countries close to Europe. Some
European productions are shifting to
countries close to Spain; it’s going
to start there and migrate to the
countries in the south,” O’Brien said.
Magna follows its customers. “We are
not going to set up operations where
there are no OEM plants nearby.
Labour cost is not a big driver for us;
for some of our competitors it is – low
shipping costs for high volumes. If
you put a footprint that 10 OEMs are
going to have plants somewhere, we
are likely to have a multiple of that
number for our big product groups,”
he said.The moving away of OEMs to new
locations involves closing down of
existing facilities. Magna also has to
face such a predicament. O’Brien
said, “It is always difficult to shut
down a plant. We make every effort to
fill it up with something else wherever
we can. It has been a long time since
we have closed operations. Even
in the downturn when some of our
customers were closing plants in
2008-09, we took on a billion dollars
of work from others. We have had
GM, Ford and Chrysler closing down
plants but more often than not in thesame state we have had Japanese
and Korean plants coming up, and in
future you will have the Chinese too.
We have probably closed operations
when we acquired another company
and found we had two plants in the
same area; but we have got the
economies by combining them and
giving employees opportunities
to move in. Years ago we closed
a powertrain facility in New York
but were able to relocate many
employees in other factories.”Futuristic
Magna is transforming from a
traditional company to something
futuristic with focus on its four pillars
of smarter, cleaner, safer and lighter
vehicles. O’Brien said, “Compared
to some of the other companies we
have a vision of the complete vehicle
as it is going to be every five years
from now, for the next 20 years. We
are not just focused on the new
elements of the vehicle but also on
what is going to remain in place. We
are still going to have metal in the
vehicle because we need to have a
structure, whether it is autonomous
or non-autonomous driving. There
are certain fundamentals that will
always be in the vehicle; we will
have paint, colour, different types
of materials, etc. All those elementsMagna Growth Strategy Pivots
Around OEM Move To Asia
By T Murrali