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Auto parts maker Magna cuts sales outlook on chip crunch, supply chain woes -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO: Magna logo is during Munich Auto Show, IAA Mobility 2021 in Munich, Germany, September 8, 2021. REUTERS/Wolfgang Rattay

(Reuters) – Canadian auto parts maker Magna International (NYSE:) Inc cut its full-year sales outlook on Wednesday, expecting a fall in global light vehicle production due to chip shortages and supply chain disruptions.

Chip scarcity has hampered automobile production around the world, bringing some assembly lines to a halt, with automakers warning the chip shortage could extend, even as vehicle demand booms in markets including the United States.

The company said it expects 2021 sales of $35.4 billion to $36.4 billion, compared with $38.0 billion to $39.5 billion forecast earlier. Magna added it expects light vehicle production to fall 7% in North America and 9% in Europe this year.

Magna, which is scheduled to report third-quarter results on Nov. 5, also cut its adjusted operating margin forecast to between 5.1% and 5.4% from 7.0% to 7.4%, citing automakers’ unpredictable production schedules and higher commodity costs.

Magna’s U.S. peer, Aptiv (NYSE:) plc, lowered its annual sales forecast earlier this month, citing the chip shortage.

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