Automobile

Stay competitive with agility, alliances, Magna CEO says

The pace of auto industry change has become more exponential than linear, said Swamy Kotagiri, CEO of Magna International.

And keeping up with it now requires a comprehensive product portfolio, partnerships and alliances — but also agility, Kotagiri said during an Automotive News Congress Conversations webcast last week.

Kotagiri, who took the helm of the Canadian supply giant in January, offered advice for industry incumbents and new entrants as they navigate changing vehicle architectures, trends in electrification and autonomy and mobility as a service.

“How do you develop your strategy so you have the ability to pivot as necessary but stay at the table?” he said. “I think it’s a balance of those two themes that we have to constantly keep in front of us.

“Working in an ecosystem and keeping your differentiation, I would say, is the most important part to be successful in the industry now,” he added. “If you’re waiting for the customer to come and ask you something, I think it’s already late.”

Magna, North America’s largest parts supplier, has been particularly bullish on its electric vehicle product development with partners over the past year.

Last month, the supplier announced a partnership with Israeli startup Ree Automotive to develop a modular electric vehicle using Ree’s platform. Magna also formed a joint venture in December with South Korea’s LG Electronics to make EV powertrains. And last fall, Magna said it will supply the vehicle platform for and build Fisker Inc.’s electric Ocean SUV.

A healthy diet of partnerships is just one way to capitalize on the mobility trends with the fastest growth rates, Kotagiri said.

“Once we decide what is important in this value stream, we decide: What do we have intrinsic within the four walls of Magna?” he said. “In some cases, it is alliances and joint ventures and partnerships. With this ecosystem, the way it is changing at the rate at which it is changing, you need to have a combination of both.”

Though it’s clear that electrification is accelerating, it’s a marathon, not a sprint, he said.

“If you look at the size of the market and the design cycles, it’s over a period of time,” Kotagiri said. “It’s not a switch on, switch off type scenario.

“The key lies in how you develop a strategy that is modular and scalable. We always looked at it as a marathon: Have the sustenance to stay in the race rather than try to address it as a sprint.”

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