Magna has no contingency plan for NAFTA yet, CEO doesn't expect major changes
The head of North America’s largest autoparts maker isn’t losing much sleep over speculation Silicon Valley wants to make a foray into carbuilding. In a First on BNN interview, Magna Chief Executive Officer Don Walker said building a vehicle is a complicated endeavor with high technical barriers to entry, making it unlikely even cash-flush technology companies could come out of left field with a car of their own.
“There’s been a lot of discussion about new entrants, whether it’s Silicon Valley, whether it’s somebody else coming up basically out of nowhere,” he said Thursday. “People will talk about Tesla. Well, Tesla’s been in the business now for 15 years, so it’s not like an overnight success, and they’re still relatively low volumes.”
Walker said he thinks big tech players like Apple or Google will play a significant role in future auto developments, just not in building a full car.
“I think there’s going to be new technologies coming from these new entrants; I think it’s a long, long way out before you have a new entrant come to mass-market in a very regulated, very complicated industry like the automotive industry,” he said. “It’s the most highly technical industry in the world, and it’s a safety product.”
In spite of his doubts a new heavy-hitter will emerge in the automotive space, Walker said Magna (MG.TO) stands to benefit if a new entrant crops up due to its experience building the 5 Series sedan for BMW.
“If there are new entrants, it actually helps Magna because we are the only supplier that has the ability to design and build complete vehicles from scratch,” he said. “But I think it’s a long way out there.”