While Magna International Inc. anticipates growth to 2022 it does expect sales this year to fall compared with 2019 due to a variety of factors.
In its outlook released Thursday, the Canadian auto supply giant said the stronger U.S. dollar, the sale of its fluid pressure and controls business and lower expected light vehicle production in Europe will all contribute to lower sales in 2020.
The company says it expects total sales between $38 billion and $40 billion this year. Net income attributable to the company for the year is expected to be between $1.8 billion and $2 billion.
CFO Vince Galifi said in a conference call that foreign exchange rates will cost the company $700 million in 2020.
The company also said Thursday that after nearly two years of collaboration, it has decided to end its self-driving technology partnership with Lyft.
“We are concluding our partnership to co-develop self-driving technology,” the company said in a statement. “We expect to continue to collaborate in several areas related to autonomous developments, including aspects of hardware development and potential joint opportunities in software and hardware manufacturing.”
Despite ending the self-driving technology partnership, Magna executives said advanced driver assistance systems, electrification and powertrain technologies are still key areas in which Magna will continue to expand.
Company executives said they see consolidation coming in the industry among automakers, Tier 1 suppliers and others developing these technologies, and that Magna may consider acquisitions related to new vehicle tech once the market levels off.
“We certainly have the ability with the balance sheet to make an acquisition we want,” Galifi said. “We want to be prudent in what we do.”
In the long term, Magna said it anticipates continued growth in total sales and improvement in its earnings before taxes, “both as compared to 2019 despite our expectation of relatively stable light vehicle production levels in North America and Europe during this same time period,” the company said.
The company also announced that its board appointed Swamy Kotagiri company president, reporting to CEO Don Walker.
Kotagiri will continue to oversee the company’s power and vision segment as well as corporate research and development programs and related investments.
Magna ranks No. 3 on Automotive News‘ list of the Top 100 global suppliers, with 2018 sales to OEMs of $40.8 billion.