Magna 2010 sales projection shows signs of growth

The Canadian Press ~ The News
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AURORA, Ont. - Magna International Inc. (TSX:MG.A) says its global sales will be in a range of US$19.5 billion to US$20.5 billion this year.
The outlook provided by Canada's largest autoparts maker is in line with 12 analyst estimates compiled by Thomson Reuters, and above their estimates for Magna's 2009 revenues.
Magna, and the auto industry in general, are recovering from a disastrous year in which two of the three big U.S. automakers, General Motors and Chrysler, survived only with the help of billions of dollars of taxpayer bailout money.
The Canadian auto parts supplier, based in Aurora, Ont., says its 2010 guidance assumes 10.3 million units produced in North America and 11.4 million units in Europe.
It also estimates that average dollar content per vehicle, in U.S. dollars, will to be between $895 and $925 in North America and between $545 and $570 in Europe.
Magna's outlook also assumes no significant acquisitions or divestitures.
The company, founded and controlled by chairman Frank Stronach, spent much of 2009 in an ultimately unsuccessful attempt to buy control of the main European subsidiary of General Motors - in partnership with Russia's Sberbank.
Magna had been expected to use Opel to support its ambitions to expand in Russia, which the company expects has higher growth potential than its traditional markets in Canada, the United States and Western Europe.
However, in a surprise move, GM reversed direction in November and scuttled a plan to sell 55 per cent of Opel to the Magna-Sberbank consortium. GM opted instead to keep Opel for itself.
Magna's brief announcement Wednesday provided scant details about its plans for 2010.
It said Magna's full-year 2010 spending for fixed assets will be in the range of $750 million to $800 million.
"This amount reflects continuing investment to support new and replacement business in our traditional markets as well as investment to expand into high-growth emerging markets."
The company also said complete vehicle assembly sales, a relatively small part of Magna's overall business, will be between US$1.6 billion and US$1.9 billion.
A consensus estimate compiled by Thomson Reuters before Magna's Wednesday announcement called for the company to generate a total of US$20.3 billion in revenue this year, up from US$17 billion in 2009.
Magna has yet to release its financial results for 2009 or the fourth quarter.

Organizations: General Motors, Magna International Inc., TSX Sberbank Magna-Sberbank

Geographic location: United States, AURORA, Canada Western Europe North America Russia

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