Market Overview

Magna Shutting Off Costly Partnership With Lyft

Share:
Magna Shutting Off Costly Partnership With Lyft

Magna International (TSE: MGA) is ending its costly two-year partnership with LYFT Inc (NASDAQ: LYFT) to jointly develop self-driving technology, the Canadian automotive supplier said Thursday as it announced that it expected sales to decline in 2020. 

The company offered no reasons for the move, stating that it and Lyft "have decided to evolve how we work together." But the partnership, built around a $200 million investment by Magna, has been a drag on earnings. 

The company reported losing $127 million in the third quarter of 2019, ostensibly on the revaluation of its investment in the U.S. ride-sharing firm. 

Magna said in the earnings outlook that it expected net income of $1.8 million to $2 million and sales of $38 million to $40 million in 2020. The company expects a decline in sales compared to 2019 because of the stronger U.S. dollar, the sale of its fluid and controls systems, lower light vehicle production and other factors. 

Magna did not link the end of its partnership with Lyft to its decline in sales. It also did not disclose its plans for the Lyft investment.

Lyft reported a $463.5 million loss in the third quarter of 2019 as it continued to grow its global ride-sharing business.

Magna noted that the companies "expect to continue to collaborate in several areas related to autonomous developments, including aspects of hardware development and potential joint opportunities in software and hardware manufacturing."

Image by MikesPhotos from Pixabay

 

Related Articles (LYFT)

View Comments and Join the Discussion!

Posted-In: Freight Freightwaves Lyft MagnaNews Startups Tech General