Automotive Supplier Posts Gains

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August 10, 2005

Automotive Supplier Posts Gains

Seattle, WA, USA--(Jobwerx News)--Global, diversified automotive supplier, Magna International, posts record sales and earnings for the second quarter.

Magna International Inc. (TSX: MG.SV.A, MG.MV.B; NYSE: MGA), posted record sales of $5.9 billion for the second quarter ended June 30, 2005, an increase of 15% over the second quarter of 2004.

Magna is a leading global supplier of technologically advanced automotive systems, components and complete modules. As of March 2005, Magna employs over 82,000 people at 223 manufacturing divisions and 56 product development and engineering centrts throughout North and South America, Mexico, Europe and Asia. As one of the most diversified automotive suppliers in the world, Magna designs, develops and manufactures automotive systems, assemblies, modules and components, and engineers and assembles complete vehicles primarily for sale to Original Equipment Manufacturers (OEMs). Magna is recognized by the world's major OEMs for its innovative technology and product design and total vehicle program management.

Magna posted record sales of $5.9 billion for the second quarter ended June 30, 2005, an increase of 15% over the second quarter of 2004. The higher sales level in the second quarter of 2005 reflects increases of 19% in North American average dollar content per vehicle and 16% in European average dollar content per vehicle, each over the comparable quarter in 2004. During the second quarter of 2005, North American vehicle production declined approximately 1% and European vehicle production declined approximately 3%, each from the comparable quarter in 2004. European complete vehicle assembly sales decreased 8% or $90 million to $1.05 billion for the second quarter of 2005 compared to $1.14 billion for the second quarter of 2004.

The Board of Directors declared a quarterly dividend with respect to their outstanding Class A Subordinate Voting Shares and Class B Shares for the fiscal quarter ended June 30, 2005. The dividend of U.S. $0.38 per share is payable on September 15, 2005 to shareholders of record on August 31, 2005.

Manga expects 2005 average dollar content per vehicle to be between $710 and $730 in North America and between $305 and $325 in Europe. We expect 2005 European complete vehicle assembly sales to be between $4.0 billion and $4.2 billion. Further, we have assumed 2005 vehicle production volumes will be approximately 15.7 million units in North America and approximately 16.1 million units in Europe. Based on expected average dollar content per vehicle in North America and Europe, current exchange rates, the above volume assumptions and anticipated complete vehicle assembly, tooling and other automotive sales, we expect our sales for 2005 to be between $21.6 billion and $22.6 billion, compared to 2004 sales of $20.7 billion. In addition, we expect that 2005 spending for fixed assets will be between $850 million and $900 million.

Magna's products also include: automotive interior and closure components, systems and modules; metal body systems, components, assemblies and modules; exterior and interior mirror and engineered glass systems; fascias, front and rear end modules, plastic body panels, exterior trim components and systems, greenhouse and sealing systems and lighting components; various powertrain and drivetrain components; and complete vehicle engineering and assembly.

In October 2004, Magna announced their intention to take each of their publicly traded subsidiaries private to further enhance their overall competitiveness. During the first quarter of 2005, they completed the privatization of Tesma International Inc. ("Tesma") and Decoma International Inc. ("Decoma") and during the second quarter of 2005 theycompleted the privatization of Intier Automotive Inc. ("Intier"). The completion of these transactions has allowed management the opportunity to evaluate alternative operating structures that could further enhance their competitiveness.

In the second quarter of 2005, Magna continued to invest in new and existing production facilities to support their continued growth, including: a new frame facility in Kentucky for the new Ford Explorer and F-Series Super Duty pickup trucks; a new fascia moulding and paint facility in Georgia to support the launch of the Mercedes M- Class and R-Class; and a new stamping facility in Sonora, Mexico to support the launch of the Ford Fusion, Mercury Milan and Lincoln Zephyr.

A number of trends have had a significant impact on the global automotive industry in recent years, including:

increased pressure by automobile manufacturers on automotive component suppliers to reduce their prices and bear additional costs;
globalization and consolidation of the automotive industry, including both automobile manufacturers and automotive component suppliers;
the evolving role of independent automotive component suppliers and their progression up the "value chain"; - increased outsourcing and modularization of vehicle production;
increased engineering capabilities required in order to be awarded new business for more complex systems and modules;
increased prevalence of lower volume "niche" vehicles built off high-volume global vehicle platforms;
growth of Asian-based automobile manufacturers in North America and Europe;
volatility of commodity costs; and
growth of the automotive industry in China and other Asian countries.

A more detailed discussion of their consolidated financial results for the second quarter and six months ended June 30, 2005 is contained in the Management's Discussion and Analysis of Results of Operations and Financial Position and the unaudited interim consolidated financial statements and notes are located on the Magna International website.

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