TOKYO -- Magna International Inc., the world's sixth-ranked auto parts supplier, said on Thursday it planned to double its business with Japanese carmakers within three years as it aims to expand its Asian operations.
Magna, which generates much of its business from the Big 3 U.S. automakers, said revenues from Japanese auto manufacturers -- almost all of it for vehicles sold outside Japan -- now made up just 6 percent of its total revenues.
"Doubling (that ratio) from 6 percent to 12 percent is something we could probably achieve within two to three years," said Mark Hogan, who ended a 30-year career at General Motors to take the helm at the Canadian firm in August.
"Our presence now (in Asia) is low so we expect to see tremendous growth in our Asia-Pacific business," he told a news conference in Tokyo on a trip to discuss the company's plans in the region.
The Aurora, Ontario-based company, which has increased its revenues by an average 21 percent per year since 1994, earlier this month projected overall sales to total between $20.3 billion and $20.6 billion in 2004, up from $15.3 billion last year.
Hogan said he expected Magna to move up in the world ranking of auto parts suppliers in 2004, after settling behind Delphi Corp., Robert Bosch GmbH, Denso Corp., Visteon Corp. and Lear Corp. last year.
Hogan noted that much of the growth in the past decade had occurred with its North American and European partners, but that future growth depended mainly on Asia.
In addition to grabbing more business with Japanese car manufacturers, Magna would expand its manufacturing capabilities in China and Korea, while looking for opportunities in the fast-growing Southeast Asian and Indian markets, Hogan said.
The integrated parts maker was a relative latecomer to China, but Hogan said there was still plenty of opportunity left, projecting the fast pace of car sales growth to resume in the middle of 2005 after a contraction in the past few months.
Hogan said the number of Magna's manufacturing plants in China would grow "significantly" from six now.
In a bid to build closer relationships with Japanese auto makers -- whose traditional "keiretsu" system of a group-based supply chain is slowly crumbling -- Magna said it appointed two former Japanese car executives to senior posts.
Tadaaki Jagawa, a one-time vice president at Toyota Motor Corp., was named senior adviser, and Seiichi Mihara, who spent 30 years at Nissan Motor Co., heads Magna's Japan operations while serving as executive director at Magna.