MAGNA Int. and NAFTA - PowerPoint PPT Presentation

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MAGNA Int. and NAFTA

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MAGNA Int. and NAFTA Presented by: Mariana Garcia V Leanne Hoffart Chris McEwen Faisal Niazi Who we are? Founded by Frank Stronach (1954) Now: 68 plants 15,000 ... – PowerPoint PPT presentation

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Title: MAGNA Int. and NAFTA


1
MAGNA Int. and NAFTA
  • Presented by
  • Mariana Garcia V
  • Leanne Hoffart
  • Chris McEwen
  • Faisal Niazi

2
Who we are?
  • Founded by Frank Stronach (1954)
  • Now
  • 68 plants
  • 15,000 employees
  • Sales of C 2.4 billion

3
1992
4
1992
  • Fast growth of the Automotive Industry
  • Penetration of North American Market by Japanese
    producers (300 plants)
  • NAFTA is signed (Canada-USA-Mexico)
  • MAGNA is looking for a long-term growth
    opportunity

5
MAGNAs Competitive Strategy
  • Full line supplier
  • Target OEMs
  • Employee empowerment
  • Decentralized Structure
  • InnovationCompetitive differentiation
  • Knowledge of the business

6
COSMAs Automotive Group
  • Metal stamping, rust proofing and sunroofs
  • Ability to design and construct its own
    die-making tools
  • Capital intensive-complexexpensive tool
  • Require automotive grade steel
  • Opened MAGNAs first Mexican division servicing VW

7
The big ?
  • MAGNA is looking for a long-term growth. MAGNA is
    already expanded all over Canada and USA. MAGNA
    wants to expand to new markets Is MEXICO the
    best option?

8
Mexican Economy, Culture and Workforce (1992)
  • Solid Economy
  • Expected growth in automotive industry
  • Predicted rise in standard of living
  • OEMs in Mexico
  • Large market
  • Low wages
  • Large labor force (26.2 M)
  • Personal Relationships important
  • Government promoting foreign investment
  • Lax enforcement of labor environmental standard

9
Problems Entering Mexican Market
  • High cost of entering
  • High training costs
  • Necessity to find steel supplier in Mexico
  • Relocation of engineers to Mexico
  • Increased Transportation costs

10
Porter Analysis
11
Effects of NAFTA
  • Tariffs
  • Trade Balancing
  • Local Content
  • Equity Restriction

12
Projected Porter Analysis
13
Alternatives
  • Remain in Canada and US markets
  • Expand into Mexico
  • Expand into a different country
  • Merge of partnership with another company

14
Recommendation
  • Expand COSMA
  • Upgrade the Puebla facility

15
Investment Strategy
  • Capital intensive industry
  • Must be aggressive
  • Cant go incrementally in need to make it full
    Market penetration to capitalize

16
QUESTIONS
  • ?
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