Magna International is engaged in the design, development and manufacture of automotive systems, assemblies, modules and components, and engineer and assemble complete vehicles, primarily for sale to original equipment manufacturers of cars and light trucks in North America, Europe, Asia, South America and Africa. Co.'s capabilities include the design and manufacture of automotive interior systems; seating systems; closure systems; body and chassis systems; vision systems; electronic systems; exterior systems; powertrain systems; roof systems; hybrid and electric vehicles/systems, as well as vehicle engineering and contract manufacturing services.manufacturing services.
Magna has no economic moat. MGA relies on superior execution for success.
Currency pressures, being felt throughout corporate America, will probably weigh on Magna International's near-term results. Weakness in the Canadian dollar and the euro, in particular, will likely take a big bite out of the top and bottom lines in 2015. Strong production trends persisting throughout North America and Asia (China, most notably). In addition, content per vehicle, a key metric in the auto parts space, continues to improve, a sign that the company is wresting further market share from its smaller rivals. Magna, equipped with excellent, should continue to return cash to its shareholders in the form of dividends and stock repurchases.
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Broad product portfolio and balanced revenue streams helps to tap high value customers
Strong geographic foothold enables to reduce the business risk in the highly volatile industry
Overdependence on few customers could impact the profitability
Warranty and recall costs could influence the operating costs
Intense competition and pricing pressure could impact results of operations
Foreign currency fluctuations would impact profit on goods
Failure to comply with environmental laws and regulations could impact financial condition
Positive outlook for the global new car market could provide a growth opportunity
Poised to benefit from the growing demand for hybrid electric vehicles
Strong outlook of the global automotive manufacturing industry could expand revenues and profits
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