Most car companies are household names: Ford, Chevy, Cadillac, Mercedes, BMW, Audi, Toyota, Honda – everyone knows who they are. Even exotic brands such as Ferrari and Lamborghini are hardly obscure.
Then there’s Magna International. Right, I know: Who’s Magna?
It’s the “world’s largest contract manufacturer of vehicles,” according to Bloomberg.
When an automaker doesn’t want to build a new assembly plant – known as “adding capacity” in auto-industry parlance – it outsources production to Magna, a Canadian manufacturer and parts supplier.
As Bloomberg’s Elisabeth Behrmann and Alex Webb report, Magna just landed a deal to build BMW 5-Series sedans. This is in addition to assembling vehicles from Jaguar Land Rover and Mercedes.
But the old-school automakers’ cars and trucks aren’t where the really interesting opportunities for Magna will be found. Magna “is also positioning itself for the prospect that technology companies will eventually join its roster of customers, along with traditional carmakers,” Behrmann and Webb report.
Of the new entrants to the auto industry that have weathered the ups and downs of a difficult business, only Tesla has really achieved anything resembling scale. Tesla already works with Magna, but Elon Musk’s electric-carmaker continues to operate its own assembly plant in Fremont, California.
When it comes to companies such as Google, Apple, and possibly even Uber, manufacturing isn’t part of the playbook. Silicon Valley tech outfits don’t want to get into the low-margin, capital-intensive auto-building business.
But they want to enter the auto industry, in various ways. That’s where Magna comes in.
The company is ideally situated to harvest this opportunity worldwide, as Silicon Valley goes shopping for the expertise that it doesn’t possess and can’t rapidly develop, at an industrial scale.
This wouldn’t make Magna a household name. But it would make Magna the biggest carmaker you’re never heard of.