Canadian auto-parts giant Magna International Inc. expects its sales growth to outperform the market over the next three years and sees particular opportunity in manufacturing complete vehicles for new industry players that have never built a car before.

The Aurora, Ont.-based supplier released its financial outlook for 2017 and its sales expectations for 2019 on Wednesday. The 2017 revenue guidance of US$36 billion to US$37.7 billion came in slightly below the consensus estimate of US$37.8 billion, but the 2019 outlook exceeded expectations.

“Over the next three years we expect to continue to outperform the market in sales growth,” Magna chief executive Don Walker told a Deutsche Bank conference on Wednesday.

The company’s 2019 outlook, which calls for total sales of US$43.5 billion to US$46.2 billion, includes the assumption that complete vehicle assembly sales will “approximately triple” by 2019 to as much as US$7.1 billion, Walker said.

Tyler Anderson/National Post
Tyler Anderson/National PostMagna CEO Donald Walker.

Magna builds complete vehicles at its Steyr subsidiary, based in Austria. It is launching significant new business in the next couple of years, including the BMW 5 Series and a program for Jaguar Land Rover in 2017, the Jaguar I-PACE battery-electric vehicle in 2018, and two other undisclosed vehicle models in 2018 and beyond.

Magna is already adding capacity to a paint shop in Slovenia to support the new business and Walker said the company will have to build another plant if it continues to win contracts — particularly if new players begin to enter the industry.

“New entrants might be an opportunity for Steyr, specifically since we can also design a vehicle from scratch,” Walker said. “Magna is unique in the world in the fact that we can make a big part of the car but we also know how to develop a car and bring it to market. We have lots of discussions with pretty well everybody who’s thinking about it, and I think it’s a big opportunity for those who would be able to help a new entrant.”

Walker wouldn’t comment on specific conversations he’s had, but Magna has long been rumoured to be talking to Apple Inc. about building an electric car for the technology giant.

Magna expects total North American light-vehicle production to fall slightly in 2017 to 17.7 million units from 17.8 million last year, before climbing to 18.4 million units in 2019. European light-vehicle production is expected to rise to 22.5 million by 2019 from 21.7 million in 2017.

“While the 2017 revenue guidance was a bit light on the surface, Magna provided a strong revenue outlook for 2019,” Citi analyst Itay Michaeli wrote in a research note, adding that the 2019 revenue guidance implies the company will outperform the market by three to seven percentage points annually.