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Magna International lowers outlook as chip shortage hurts auto production

October 20, 2021   by The Canadian Press

TORONTO – Magna International Inc. is lowering its outlook for the year as a result of lower than expected auto production as the industry continues to struggle with a shortage of semiconductor chips.

The auto parts maker says it expects light vehicle production this year to be down seven per cent in North America and nine per cent in Europe relative to its expectations in August.

As a result of the lower assumed production, Magna says it now expects total sales for 2021 to be in the range of US$35.4 billion to $36.4 billion.

The range is down from its August outlook for between US$38.0 billion and US$39.5 billion.

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Magna also says its adjusted earnings before interest and taxes margin is now expected to be in the 5.1 per cent to 5.4 per cent range, compared with 7.0 per cent to 7.4 per cent in its August outlook.

Magna is expected to report its financial results for the third quarter on Nov. 5.