Magna reports record sales, buys rest of E-Car partnership
Magna International Inc., Canada’s largest auto parts manufacturer, delivered a record-breaking second-quarter result driven by a strong performance in the North American market, and has also reached a deal with a company affiliated with...
Magna International Inc., Canada’s largest auto parts manufacturer, delivered a record-breaking second-quarter result driven by a strong performance in the North American market, and has also reached a deal with a company affiliated with the Stronach Group to buy the remaining 27 per cent stake in Magna E-Car Systems for $74.7 million.
“We are pleased to regain control of Magna E-Car’s assets and business, which will be absorbed within our existing operating units,” Magna chief executive Don Walker said in a statement. “We expect hybrid and electric vehicle production to continue to grow globally in the future, and we believe that Magna stands to benefit from this trend by supplying H/EV components, systems and engineering services to our customers.”
Magna founder Frank Stronach, whose family long controlled the company, gave up that control in 2010 in exchange for about $1 billion in cash and shares, as well as control over joint venture Magna E-Car Systems.
Last August, Magna announced it was spending $430 million to research and develop electric-vehicle technology in Ontario.
The E-Car buyout comes as Magna reported a record second quarter result that exceeded expectations, driven primarily by improved North American vehicle production. The company reported a Q2 2012 net income of $349 million, up from $282 million a year earlier. The performance was driven by a record $7.7 billion in sales during the quarter, up 5 per cent from a year ago, with vehicle production in North America up 28 per cent, more than offsetting a 7 per cent decline in Europe.