Exactly what Magna does with this combined expertise and product lineup is a key question. Shulkin says there’s little overlap between the two companies’ expertise and customer bases, and the deal combines to strengthen Magna’s business in China and India.
Lakrintis says companies such as Stellantis and Mazda are potential new customers for Magna. But overall, he says most OEMs have favored developing their own software and bolstering their own intellectual property libraries. Perhaps, then, more customers may come from newer entrants such as Fisker, the company for which Magna will put its contract-manufacturing expertise to use and build the Ocean SUV at its Magna Steyr factory in Graz, Austria.
Is that a sign of bigger things to come? In April, The Korea Times reported Apple was “very close” to signing a deal with Magna and LG to build electric vehicles.
Four months later, no such deal has been announced, but Magna “could be well suited for that,” said Mark Fitzgerald, also an industry analyst at Strategy Analytics. “But no one really knows what goes on behind the curtains at Apple, and how important automotive is seems to wax and wane — they’re all in on Project Titan one day, and then they don’t know what to do with it. The margins are low. The units are low. Most of the suppliers are a pain to deal with. So why bother?”
Barnden is bullish on believing the deal portends big things for Magna.
Magna and LG established a joint venture called LG Magna e-Powertrain to work on electrification in December and announced their leadership team and more details just last week. Magna has its complete-vehicle assembly expertise. And now it has furthered its advanced driver-assistance system capabilities.
Tectonic plates have shifted into place, but much like the sensibility of a Veoneer acquisition, Barnden said few have noticed the big picture emerging from Magna’s incremental steps.
“There’s no barrier to entry, and if Fisker can do this with Magna, then Apple can do this with Magna,” he said.
“It’s a question of them doing something really unique on the cabin experience, and something really exciting with driver monitoring, maybe related to eye-gaze control. People will look at that and go, ‘Wow!’ … We can see these pieces coming together. The whole interface between humans and the car will change in the next few years, rather than the human in the back seat while the car drives. It’s all happening, but nobody’s watching.”
