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

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– Canadian auto parts maker Magna International 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 plc, lowered its annual sales forecast earlier this month, citing the chip shortage.

(Reporting by Kannaki Deka in Bengaluru; Editing by Vinay Dwivedi)

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