Magna Soon Without Mini
Are you a short seller who is on the hunt for companies that are worse off than European carmakers? Look for parts makers that are also in the contract manufacturing business. OEMs may lose sales, but contract manufacturers lose whole contracts when manufacture is brought in-house by OEMs. Magna is likely to lose the contract with BMW to build the next generation of Mini cars, says Reuters.
Austrian Magna Steyr produces the Mini Countryman and will begin producing the Paceman later in the year, but possibly not for long.
“We let Magna Steyr produce the Countryman and the Paceman, but in the mid-term we are looking at concentrating Mini production in two locations, namely Oxford and NedCar,” a BMW spokesman told Reuters.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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But why?
With all the European overcapacity, this probably is real bad news for Magna, but I disagree with this one as a short candidate. Magna has one of those family share classes, where the family holds all the important shares, and the public really has only a small stake in the company, ever. Selling it short, or expecting much gain out of this one isn't going to happen unless you're on the inside.
BMW kept the wrong factory - Plant Oxford (Cowley) is running at capacity and is all hemmed in with no real room for expansion, while most of the still-sprawling Longbridge complex lies vacant. They should have taken the bigger plant when they had the chance, but, then 12 years ago, who would have really predicted MINI would be as big a success as it is?