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.
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.