Magna International, a Canadian auto components company, lowered its full-year sales forecast on Wednesday, citing a drop in global light vehicle production owing to chip shortages and supply chain disruptions.
Chip scarcity has slowed automobile manufacturing around the world, bringing some assembly lines to a halt, with automakers warning that the chip shortfall could last longer, even as demand for vehicles rises in markets such as the United States.
Sales of $35.4 billion to $36.4 billion are expected in 2021, compared to $38.0 billion to $39.5 billion previously projected. Magna also forecasts a 7% drop in light vehicle output in North America and a 9% drop in Europe this year.
Magna decreased its adjusted operating margin projection from 7.0 % to 7.4 % to between 5.1 % and 5.4 %, blaming automakers' uncertain production schedules and rising commodity costs.
Aptiv , Magna's U.S. competitor, cut its annual sales forecast earlier this month, citing the chip scarcity.