VIENNA, Austria -- Western Europe can still be a profitable manufacturing location, said Siegfried Wolf, co-CEO of Magna International.
In a presentation Wednesday to the Automotive News Europe Congress here, Wolf dismissed analysts who say the European auto industry must move manufacturing to lower wage countries.
"We have just built two new facilities in Germany and one in France, and all three are profitable," he said.
Relocating a problem does not eliminate that problem, Wolf said.
"Lowering costs means adding operations in lower cost countries, not moving (existing) operations there," he said. "Only a strong, prosperous and competitive home base can support sustained growth in new markets. But growth in new markets and low-cost country sourcing is essential to keep the home base strong."
Wolf, whose Magna operation has had 21 percent compound annual growth since 1991, offered advice to those wanting to improve the performance of western European units.
"We need people in the auto industry who concentrate on the product and not the financial side," he said. "We mustn't get away from the product."
Magna, which manufactures a wide range of vehicle systems and also builds complete cars for Mercedes-Benz, BMW, Saab, Jeep and Chrysler, currently has 3.5 percent of the global market for outsourced activities.
"We plan to reach 10 percent," Wolf said. "With our growth rate we are doubling our sales every four to five years, and we plan to achieve this growth by bringing further customers into our portfolio."
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