Magna recently announced that it will establish a new factory in India to respond to the declining revenue in Europe and North America. The new electric vehicle that is being developed in cooperation with Ford will also be listed in India.

Frank O'Brien, Magna's executive vice president, said that Magna will release production equipment based on the number of automakers in India, and the production equipment will cover all of the company's India branch's product range.

At present, Magna has a total of five branches in India, including a joint venture with Indian component manufacturers Lumax, Amtek, and Rico. It is based in Cosmo International, Pune, India, and in Chennai. Magna Closures. In addition, Magna Steyr established an engineering center in Pune.

As more and more automakers in India have expanded their production capacity, the establishment of a new plant in India will facilitate Magna's expansion of its business relationship and increase sales and profitability.

【News Reviews】

In the past six months, globalization has no longer been moving forward along a path of continuous expansion; the impact of this status on the global market is becoming more and more important. In an interview with McKinsey, political risk consultant Ian Bremmer stated that there will be a major trend in the next 5, 10, and 15 years. State capitalism will become a greater challenge for globalization, and the emerging markets will be state-owned. Businesses have become increasingly powerful. So how do we face the challenges that the economic crisis has brought to globalization? Aowei Consulting has proposed the following four suggestions:

1. Avoid competitors from low-income countries

European suppliers are facing new competitors from developing countries, especially China and India and other fast-growing markets. Increasing price pressures and above-average import tariffs and localized purchase quotas are forcing manufacturers to recruit in the local market. With new suppliers, once their quality has reached the same level, manufacturers may also use the price advantage of assembling cars in their area.

For chassis components or simple as semi-duplex electronics, suppliers may follow their European customers everywhere to prevent new competitors from appearing. However, for a highly complex system such as a chassis electronic control system or the transportation of expensive components such as large body parts, it is impossible to achieve this kind of outflow in the next few years.

2. Win new customers outside of Europe

One of the difficult tasks of auto suppliers is to obtain a place between automakers in Korea and Japan. The obstacles they face include different ways of selling and retaining customers and different development and continuous improvement processes.

In contrast, the growing auto market in China, India and Russia provides better opportunities for new customers. Although in order to win, suppliers must have the right product supply, low-cost production base, and their own local development capabilities (at least in the medium term).

3. Build a cost-effective production and development network

In the past few decades, more parts came from Hungary, the Czech Republic, Poland, China, India and South Korea. In these countries, the cost of wages is just one of the costs of many regionally relevant factors. In addition to costs, suppliers should also consider aspects such as access to cheap capital or investment assistance, proximity to customers, level of competition, flexibility in production, and an atmosphere for establishing local R&D resources.

4. Procurement in low cost countries

Communication and documentation barriers as well as complex logistics chains and processes make purchasing in emerging markets difficult. Delays in the misuse of regional infrastructure and customs processing can result in erratic delivery performance and lengthy transit times. This will lead to higher inventory, which in turn may eliminate most of the theoretical procurement advantages.

Companies trying to control these issues can achieve 20-40% cost savings on selected parts. As component costs flow directly to product costs, good purchasing can greatly increase the supplier's competitive position.

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