2024
AnnualInformation Form
March 27, 2024
Magna International Inc.

Contents
Annual Information Form
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A-1

Forward-Looking Statements
Corporate Structure
About Magna
Our Industry
Our Business & Strategy
Risk Factors
Description of the Business
Innovation and Research & Development
Capital Structure, Financings & Credit Ratings
Directors & Executive Officers
Legal Proceedings
Other Information
Schedules
Appendix 1 – Sustainability Report FY 2023

Im por t a n t I n for ma ti on A b ou t t h i s D o c u m e n t
This Annual Information Form (“AIF”) provides information about Magna International Inc. (“Magna”), including its industry, corporate
structure, strategy, risk factors relating to its business and operations, products and services, sustainability activities, and other information
related to its business activities.
Readers should note that in this AIF:◾

we use the terms “you” and “your” to refer to the shareholder,
potential investor, or reader while “we”, “us”, “our”, “company” and“Magna” refer to Magna International Inc. and, where applicable,
its subsidiaries;◾ we use the term “Executive Management” to refer to our Chief
Executive Officer, together with our Presidents and our corporate
Executive Vice-Presidents;◾ we use the term “Operating Group management” to refer to thesenior management within each of our product-based business
units corresponding to the capabilities described in “Section 6 –Description of the Business – Products & Services” in this AIF;
◾ dollar amounts in this AIF are stated in U.S. dollars, unlessotherwise indicated;◾ a reference to “fiscal year” is a reference to the fiscal or financial
year from January 1 to December 31 of the year stated;◾

sales figures disclosed have been prepared in accordance with
United States Generally Accepted Accounting Principles(U.S. GAAP);◾

where we have referred to specific customers or competitors, thereference includes the customers’ or competitors’ operating
divisions and subsidiaries, unless otherwise stated;◾

facility and employee figures include certain equity-accounted
operations, unless otherwise indicated;◾

references to our “Circular” refer to our Management Information
Circular/Proxy Statement dated March 27, 2024 for our virtual-only2024 Annual Meeting of Shareholders to be held on May 9, 2024
(the “Meeting”); and◾

information is current as of March 27, 2024, unless otherwise
indicated.

Fo rwa rd- Lo ok i n g S t a temen t s
We disclose “forward-looking information” or “forward-looking statements” (collectively, “forward-looking statements”) to provide information
about management’s current expectations and plans. Such forward-looking statements may not be appropriate for other purposes.
Forward-looking statements may include financial and other projections, as well as statements regarding our future plans, objectives or
economic performance, or the assumptions underlying any of the foregoing, and other statements that are not recitations of historical fact.
We use words such as “may”, “would”, “could”, “should”, “will”, “likely”, “expect”, “anticipate”, “believe”, “intend”, “plan”, “aim”, “forecast”,“outlook”, “project”, “estimate”, “future” “target” and similar expressions suggesting future outcomes or events to identify forward-looking
statements.
Forward-looking statements in this AIF include, but are not limited to, statements relating to:◾

implementation of our business strategy, including: increasing
capital deployment toward high-growth/megatrend areas alignedwith the “Car of the Future”; driving operational excellence; andunlocking new business models and markets;◾ implementation of our segment-specific strategic initiatives;◾ implementation of our sustainability strategy and initiatives, andachievement of sustainability targets/commitments;◾

our approach to capital structure, including; maintenance of astrong balance sheet; preservation of strong investment grade
ratings; delivering strong Return on Invested Capital; investing for
growth; achieving our target leverage ratio; future returns of capitalto our shareholders through dividends; and repurchasing shareswith excess liquidity;◾ implementation of our supply chain initiatives; and◾ estimates of future environmental clean-up and remediation costs.

Forward-looking statements are based on information currently available to us and are based on assumptions and analyses made by us inlight of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors
we believe are appropriate in the circumstances.
While we believe we have a reasonable basis for making such forward-looking statements, they are not a guarantee of future performanceor outcomes. Whether actual results and developments conform to our expectations and predictions is subject to a number of risks,
assumptions, and uncertainties, many of which are beyond our control, and the effects of which can be difficult to predict, including, without
limitation:

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Annual Information Form

Macroeconomic, Geopolitical and Other Risks◾
◾
◾

inflationary pressures;interest rate levels;
geopolitical risks;

Pricing Risks
quote/pricing assumptions;◾ customer pricing pressure/contractual arrangements;◾ commodity price volatility;◾ scrap steel/aluminum price volatility;◾

Risks Related to the Automotive Industry◾
◾

economic cyclicality;
regional production volume declines;◾ deteriorating vehicle affordability;◾ misalignment between Electric Vehicles (“EVs”) production andsales;◾ intense competition;
Strategic Risks◾
◾
◾
◾

alignment with the “Car of the Future”;
evolving business risk profile;technology and innovation;
investments in mobility and technology companies;

Warranty/Recall Risks◾

repair/replacement costs;
warranty provisions;◾ product liability;◾

Climate Change Risks◾
◾

transition risks and physical risks;
strategic and other risks;

IT Security/Cybersecurity Risks◾
◾

IT/cybersecurity breach;product cybersecurity breach;

Customer-Related Risks◾
◾

customer concentration;
growth of EV-focused original equipment manufacturers(“OEMs”);◾ growth with Asian customers;◾ risks of conducting business with newer EV-focused OEMs;◾ Fisker’s ability to continue as a going concern;◾ dependence on outsourcing;◾ OEM cooperation and consolidation;◾ market shifts;◾ consumer “take rates” shifts;◾ quarterly sales fluctuations;◾ customer purchase orders;◾ potential OEM production-related disruptions;
Supply Chain Risks◾
◾
◾
◾

semiconductor chip supply disruptions and price increases;
supply chain disruptions;regional energy supply and pricing;supply base condition;

Manufacturing/Operational Risks◾
◾

product launch;
operational underperformance;◾ restructuring costs;◾ impairments;◾ labour disruptions;◾ skilled labour attraction/retention;◾ leadership expertise and succession;Acquisition Risks◾

acquisition of strategic targets;
inherent merger and acquisition risks;◾ acquisition integration and synergies;◾

Other Business Risks◾

joint ventures;
intellectual property;◾ risks of doing business in foreign markets;◾ relative foreign exchange rates;◾ currency devaluation in Argentina;◾ pension risks;◾ tax risks;◾ financial flexibility;◾ returns on capital investments;◾ credit ratings changes;◾ stock price fluctuation;◾ payment of dividends;◾

Legal, Regulatory and Other Risks◾

antitrust proceedings;
legal and regulatory proceedings;◾ changes in laws;◾ free trade agreements;◾ trade disputes/tariffs; and◾ environmental compliance.
◾

In evaluating forward-looking statements or forward-looking information, we caution readers not to place undue reliance on any forwardlooking statement, and readers should specifically consider the various factors which could cause actual events or results to differ materiallyfrom those indicated by such forward-looking statements, including the risks, assumptions, and uncertainties above that are discussed ingreater detail in this AIF under “Section 5 – Risk Factors”.

Magna International Inc.

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1. Corporate Structure
Is su er
Magna was originally incorporated under the laws of the Province of Ontario, Canada on November 16, 1961. Our charter documents
currently consist of amended and restated articles of incorporation dated December 31, 2017, which were issued pursuant to the BusinessCorporations Act (Ontario).
Our registered and head office is located at 337 Magna Drive, Aurora, Ontario, Canada L4G 7K1. Our Common Shares trade on the Toronto Stock
Exchange (“TSX”) under the trading symbol “MG”, and the New York Stock Exchange (“NYSE”) under the trading symbol “MGA”. For a list of our principal
subsidiaries and investments, please refer to Schedule A.

2. About Magna
Over view
Magna is more than one of the world’s largest Tier 1 suppliers in the automotive space. We are a mobility technology company with morethan 179,000 entrepreneurial-minded employees(1), 342 manufacturing and assembly operations and 104 product development,
engineering, and sales (“PDE&S”) centres in 28 countries(2), as follows:

35
4

Eastern Europe

56
17

Mexico69
45

Western Europe

50
9CanadaUSA
Africa320South America

88
25

2
1

Asia

10
3

Manufacturing / Assembly

Product Development / Engineering / Sales

Our systems approach to design, engineering, and manufacturing touches nearly every aspect of the vehicle. We have complete vehicle
engineering and contract manufacturing expertise, as well as product capabilities which include body, chassis, exterior, seating, powertrain,
active driver assistance, electronics, mechatronics, mirrors, lighting, and roof systems. Magna also has electronic and software capabilities
across many of these areas. In addition, we are leveraging our capabilities and platform technologies in areas such as battery management,
software stack, and sensors to enter growing adjacent mobility markets such as micromobility.
Our business is managed under four operating segments which have been determined on the basis of technological opportunities, productsimilarities, as well as market and operating factors, as follows:◾
◾

Body Exteriors & Structures
Power & Vision◾
◾

Seating Systems
Complete Vehicles

Our internal financial reporting is aligned with the way our business is managed. Accordingly, we present key internal operating performancemeasures for the reporting segments described above to our chief operating decision maker to use in the assessment of operating
performance, allocation of resources, and to help plan our long-term strategic direction and future global growth.
(1)

Number of employees includes over 166,000 employees at our wholly owned or controlled entities and over 13,000 employees at certain operations accounted for under theequity method.

(2)

Manufacturing operations and PDES centres include certain operations accounted for under the equity method.

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Annual Information FormOu r Corporate C u l tu r e
At Magna’s foundation is an entrepreneurial, decentralized, fair enterprise culture, the key elements of which are as follows:
Entrepreneurialism and Decentralization
We follow a corporate policy of functional and operational decentralization, which we believe increases flexibility, customer responsivenessand productivity.
◾

Our manufacturing and assembly operations are conducted through “Divisions”, each of which is an autonomous business unit
operating within pre-determined guidelines. Each Division is a separate profit centre under the authority of a general manager who has
the discretion to determine rates of pay, hours of work and sources of supply, within the framework of our Employee’s Charter, our
Global Labour Standards Policy and our Operational Principles (each as described below), as well as our corporate policies.

◾

Divisions are aligned globally by product area in Operating Groups. Operating Group management is responsible for overseeing theDivisions within its product area(s), including approval of Divisional business plans and preparation of Operating Group business plansfor presentation to Executive Management. Our Operating Groups are aligned under four reporting segments overseen by members of
Executive Management to ensure that the Operating Groups are: taking advantage of cross-Group synergies; sharing research anddevelopment and best practices; and consistently approaching technology trends that impact their business and our customers.

◾

Our Executive Management team, led by our CEO, interfaces with the investment community and is responsible for our long-term
strategic planning and future growth, as well as monitoring the performance of Operating Group management. In addition, our Executive
Management: allocates capital; oversees mergers, acquisitions and strategic alliances; manages global marketing and customer
strategies; develops employee policies and programs; manages leadership training, development and succession planning; oversees
and supports our sustainability and environmental, social and governance (“ESG”) strategy, targets and global initiatives; and develops
common finance, internal controls, compliance, IT, quality, environmental, health & safety, ergonomics and other policies, programs or
global standards.

Employee’s Charter & Global Labour Standards Policy
We are committed to operating our business in a way that is based on fairness and concern for our employees. Our Employee’s Charter setsout key principles outlining this commitment. Our Global Labour Standards Policy further articulates our Fair Enterprise Culture and provides
a framework for our commitment to fundamental human rights and international labour relations. See “Appendix 1 – Sustainability
Report – Section 4.2 Fairness and Concern for Employees” for a description of our human resource principles, including our Employee’s
Charter, as well as the details of our Global Labour Standards Policy and the key commitments that it sets out.
Operational Excellence
As part of our strategic priority of achieving operational excellence in our facilities globally, each facility is required to adhere to a set ofOperational Principles that define a set of common goals and recommended tools/business practices in the following areas: Employee
Focus; Safe and Healthful Work Environment; Pride in Craftsmanship and Total Quality; Integrity and Respect; Operational Effectiveness;
Scrap and Waste Elimination; Operational Availability; Communication; and Recognition and Rewards. The Magna Operational Principles
are linked to our MAFACT assessment system (detailed in “Section 6 – Description of the Business – Manufacturing & Engineering” and“Factory of the Future (FoF) Initiatives” in this AIF) to allow our operations to continually measure their progress in achieving operational
excellence.
Incentive-Based Management Compensation
We maintain an incentive-based compensation system for management, which directly links short-term incentive compensation to theoperational performance of an applicable business unit, as measured by profitability. In the case of our Divisions and Operating Groups, theshort-term incentive formula is based on Divisional or Operating Group EBIT, after taking into account a funds employed charge. For our
Executive Management, the short-term incentive is directly linked to Magna’s pre-tax profit and, beginning in 2024, free cash flow. Membersof our Operating Group management and Executive Management also receive equity-based incentives tied to metrics such as return on
invested capital (ROIC), stock price performance, and relative total shareholder return. Our approach to executive compensation is describedin further detail in the sections of our Circular titled “Compensation and Performance Report” and “Compensation Discussion & Analysis”.
Sustainability
We are committed to being a responsible corporate citizen that conducts business in a manner that balances profits, people, and planet.
Magna accepts the reality of climate change and the importance of addressing sustainability in our operations. To this end, we are committed
to decarbonization of our operations and have committed to near-term (by 2030) and net-zero (by 2050) science based targets with respect
to Scopes 1, 2 and 3 GHG emissions. In support of these targets, we have committed to achieving 100% renewable electricity usage by2025 in our European operations, and by 2030 globally. For a full discussion of our sustainability strategy, initiatives, targets, andachievements to date, see “Appendix 1 – Sustainability Report”.

Magna International Inc.

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3. Our Industry
Ge nera l
The global automotive industry is a complex, high-tech manufacturing industry. The industry is rapidly evolving in response to societal,
mobility-related, and economic trends, including the transition to a lower carbon economy, which is accelerating the shift from internal
combustion to electric propulsion. These trends are detailed in “Section 4 – Our Business & Strategy – Industry Trends”. Tier 1 automotive
suppliers (“Tier 1 Suppliers”) design, engineer and manufacture components, assemblies, systems, subsystems, and modules for original
equipment manufacturers (“OEMs” or “automobile manufacturers”) of vehicles and light trucks. Tier 1 Suppliers source subcomponents
from Tier 2 and other sub-suppliers, which are integrated into the products sold by the Tier 1 Suppliers directly to OEMs.
The global automotive industry is cyclical and is sensitive to a broad range of macroeconomic, political, and other trends as discussed in“Section 4 – Our Business & Strategy” in this AIF. Throughout 2023, the automotive industry continued to experience a number ofmacroeconomic and industry challenges, although a number of these challenges have moderated compared to prior years:◾

elevated levels of inflation, with higher commodity, energy, labour, freight, and other production input pricing expected to persist in
2024;◾ supply chain disruptions, including the global shortage of semiconductor chips that has had a material adverse effect on global
automotive production volumes since 2020 and may continue having some impact in 2024;◾ a deterioration in vehicle affordability due to a combination of factors, including: higher prices for; costs related to advanced electronicsystems; increasing vehicle finance costs due to elevated interest rates; inflationary cost increases impacting the entire bill of materials
for a vehicle; and, in some cases, limited vehicle supply; and◾ misalignment between EV production and sales as a result of uncertainty as to consumer acceptance of EVs due to issues including:vehicle affordability; availability of government subsidies; concerns regarding battery technologies; driving range anxiety; charging
infrastructure concerns; and new EV OEM limited operating/warranty history.
See “Section 4 – Our Business & Strategy – Macroeconomic, Political and Other Trends” and “Industry Trends” for details of how thesetrends affect Magna and the automotive industry. See also “Industry Trends” in our Management’s Discussion & Analysis of Results ofOperations and Financial Position for the year ended December 31, 2023 (“MD&A”).

Au tomotive P r od u cti on M a r ke t s
OEMs have historically built their vehicles in the regions where those vehicles are primarily sold and, as a result, many OEMs have establishedmanufacturing facilities in multiple countries. While we believe this historical practice will continue long term; currently some of the Chinabased, EV-focused OEMs, such as BYD and Geely, are entering the European market with vehicles exported from China, while VinFast, aVietnam-based, Ev-focused OEM, has entered the European and North American markets with vehicles exported from Vietnam. Since
OEMs typically use lean manufacturing and supply chain management techniques in their operations, many Tier 1 Supplier facilities are
generally located relatively close to OEM facilities to reduce the cost and risks associated with longer supply chains. See“Section 6 – Description of the Business – Manufacturing & Engineering” of this AIF for details of Magna’s global manufacturing footprint.
China, Europe, North America, Japan, India, and South Korea represent the largest automotive production markets in the world, accounting
for approximately 89% of vehicles produced globally.(1) China’s approximate 32% share of global production led all markets in 2023,
followed by the United States and Japan, with 11% and 10% shares, respectively.(1) The local demand for vehicles in China, India, andcertain markets outside of North America and Western Europe has increased over time. This increasing local demand has helped boost the
local automotive industry in these countries and attracted investments in manufacturing from North American, European, and Asian-based
automobile manufacturers, through stand-alone investments and/or joint ventures with local partners. In the case of China, the increasing
migration of component system and vehicle design, development, and engineering, especially for battery electric vehicles (“BEVs”), is
expected to further benefit the automotive industry in that market.

Cu stomers
OEMs produced over 90 million light vehicles in 2023, an approximately 10% increase over 2022 production.(1) The top 15 OEMs,
representing approximately 80% or approximately 72 million vehicles based on 2023 light vehicle production, were:(1)1. Toyota Motor Corporation
2. Volkswagen Group
3. Hyundai Motor Group
4. Renault-Nissan-Mitsubishi Alliance
5. Stellantis N.V.
6. General Motors Company
7. Ford Motor Company
8. Honda Motor Company(1)

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S&P Global Mobility

Annual Information Form

9. Suzuki Motor Corporation
10. BYD Auto
11. Zhejiang Geely Holding Group12. BMW AG
13. Mercedes-Benz AG
14. Chang’an Automobile (Group) Co., Ltd.
15. Tesla, Inc.

The considerable growth of the Chinese automotive market over the past decade has led to the significant growth of several Chinese OEMs,
including BYD Auto, Geely, and Chang’an, as listed above. In addition, the growing trend toward vehicle electrification has led to theemergence of newer EV-focused OEMs, particularly in China. See “Section 5 – Risk Factors – Growth of EV-Focused OEMs; Risks of
Conducting Business with Newer EV-Focused OEMs”, and “Fisker’s Ability to Continue as a Going Concern” in this AIF.
For a list of our top customers on a consolidated basis and within each reporting segment, see “Section 6 – Description of theBusiness – Products & Services” in this AIF.

Co mpetition
In spite of high barriers to entry in many product areas, as well as the highly capital intensive nature of the global Tier 1 automotive supply
industry, competition is fierce and intensifying from many different sources. For most of our Operating Groups, competition comes primarily
from automobile manufacturers and from other “traditional” Tier 1 Suppliers, including ones in which one or more automobile manufacturers
may have direct or indirect investments. However, with the growing importance of electrification and electronics in the automotive value
chain, a number of established electronics and semiconductor chip and manufacturing companies have entered or expanded their presencein the automotive industry, becoming direct competitors to Tier 1 Suppliers, including us. Additionally, disruptive technology innovators arechanging the competitive landscape of the automotive industry through the development of high-value product and service offerings,
particularly in areas related to vehicle electrification, vehicle autonomy, new mobility, and connectivity, which traditional automotive suppliers
may not be able to match. As a result of these trends, some suppliers seek to enhance their competitive positioning by entering into
strategic partnerships, joint ventures or collaborations with technology and software companies. Lastly, competition has also intensified as
automobile manufacturers have reduced the number of their Tier 1 Suppliers in connection with their strategy to increase the number andrange of vehicles built from high-volume global platforms.
The basis on which automobile manufacturers select automotive suppliers for particular programs is determined by a number of factors,
which may include, among other factors: price; overall relationship, including historical performance with respect to innovation, quality/
warranty and timeliness of delivery; manufacturing footprint; proprietary technologies; financial strength; ability to test and validate newtechnologies for application in the automotive industry; scope of in-house engineering and tooling capabilities; carbon footprint and alignment
with the customer’s sustainability/ESG goals and targets; existing agreements.
The number of competitors that are asked by automobile manufacturers to bid on any individual product has been reduced in many cases.
We expect further reductions as a result of the increasing preference of automobile manufacturers to deal with fewer suppliers and reward
those suppliers with earlier and deeper involvement.
Based on 2022 global automotive parts sales to OEMs, the top 10 Tier 1 Suppliers globally were:(1)Supplier

Key Automotive Products(2)Key Automotive Products(2)Supplier(3)

1. Robert BoschPowertrain solutions, chassis
systems control, electrical
drives, car multimedia,
electronics, aftermarket
products, steering

6. Hyundai Mobis

In-vehicle infotainment
systems, braking, steering,lamps, safety, suspension,autonomous driving,
electrification systems,
advanced driver assistancesystems

2. Denso Corporation(3)Thermal systems, powertrainsystems, electrification
systems, mobility electronics,
sensor system &semiconductors

7. Aisin Corporation(3)Powertrain, chassis andvehicle safety systems, bodyelectronics, vehicle navigation
systems

3. ZF Friedrichshafen AG

Electrified powertrain, chassis,
driveline, braking systems,
steering wheel, autonomoustransport systems, electronics& advanced driver assistancesystems, active & passive
safety systems

8. Forvia Group

Seating, interiors, clean
mobility (exhaust systems),
lighting, hydrogen mobility,
electrification and energy
management, cockpit,
electronics & software
integration

4. Magna International Inc.

Body and chassis, exteriors,
powertrain, active driverassistance, electronics, mirrors
and lighting, mechatronics,
seating systems, vehicle
engineering andmanufacturing, roof systems

9. Continental Corporation

Autonomous mobility, passive
safety, brake, chassis, motion
and motion-controlled
systems, tires, rubber, electric
mobility, connected mobility

Magna International Inc.

7

Supplier

Key Automotive Products(2)Supplier

Key Automotive Products(2)5. Contemporary Amperex
Technology Co., Ltd.

Electric vehicle battery
systems and services, battery
swapping service, building
automation, energy
management system andfacility management, cells,
modules and battery pads,
battery materials, clean energy
storage solutions, battery
recycling

10. Lear Corporation

Seating, electrical distribution
and connection systems,
battery disconnect systems,
electronic systems, softwareand connected services,
electronic control modules,
electrification products,
connectivity products

Notes:(1) Automotive News (supplement) (June 26, 2023).
(2) Key automotive product descriptions are based on information from each Tier 1 Supplier’s website.
(3) OEM subsidiary or OEM investee.

While no single Tier 1 Supplier currently supplies a full range of products which compete with ours, a number of Tier 1 Suppliers can produce
some or many of the same types of components, assemblies, modules, and systems that we currently produce. Some of our competitors
may have greater technical or other resources than we do and some of them may be stronger in markets in which we operate. A list of our
key competitors within each product capability in our reporting segments can be found in “Section 6 – Description of theBusiness – Products & Services” in this AIF. See also the risk factors related to “Intense Competition” and “Technology and Innovation” in“Section 5 – Risk Factors” in this AIF.
Magna’s Foundational Strengths
We believe that we possess a number of foundational strengths that give us a competitive advantage as a Tier 1 Supplier, including our:8◾

decentralized operating model, entrepreneurial culture, and “ownership” mentality;◾

manufacturing expertise;◾

complete vehicle and broad systems engineering expertise;◾

strong balance sheet and emphasis on disciplined, profitable growth;◾

depth of talent;◾

global scale;◾

focus on innovation and our “start‐up” mindset, as well as a strategic portfolio of product groups that enable us to provide innovative,complete vehicle solutions to our customers, while:◾

generating cash to fund investments in high-growth areas; and◾

enabling access to new business models and/or new customers.

Annual Information Form

4. Our Business & Strategy
Bu sin ess Dr i ver s
Our business and operating results are primarily dependent on the levels of North American, European, and Chinese car and light truck
production by our customers. Ordinarily, OEM vehicle production levels are aligned with vehicle sales levels and thus affected by changes
in such levels. While we supply systems and components to every major OEM, we do not supply systems and components for every
vehicle, nor is the value of our content consistent from one vehicle to the next. As a result, customer and program mix relative to market
trends, as well as the value of our content on specific vehicle production programs, are important drivers of our performance. Key factors
impacting production volumes, product/customer mix and content, as well as legislative/regulatory trends are listed below.
Growth Driver

Factors Potentially Impacting Growth Driver

Vehicle Production Volumes◾

Customer and Program Mix◾

Vehicle sales levels, which are affected by:◾ General macroeconomic and political conditions◾ Consumer confidence levels, which may be affected by consumer perceptions andgeneral trends related to the job, housing, and stock markets, as well as elevated levels of
inflation, and other macroeconomic and political factors◾ Vehicle affordability◾ Interest rates and/or availability of credit◾ Fuel and energy prices◾ Relative currency values◾ Regulatory restrictions on the use of vehicles in certain megacities◾ Uncertainty as to consumer acceptance of EVs, including due to: availability of
government subsidies; concern regarding battery technologies; driving range anxiety;adequacy of charging infrastructure; new EV-focused OEMs with little to no operating/warranty history◾ Supply chains and infrastructure, including supply chain disruptions◾ Energy supply disruptions or shortages that could result in unplanned production shutdownsof some of our, our sub-suppliers’ and customers’ manufacturing facilities◾ Free trade arrangements, trade disputes and tariffs◾ Availability and relative cost of skilled labour◾ Labour disruptions◾ OEM production disruptions◾ Commodities prices◾ Relative currency values◾ Regulatory considerations, including environmental, emissions, and safety standards
OEM outsourcing strategy, as well as their supplier preferences and relationships
OEM decisions to allocate production inputs that are in limited supply, such as
semiconductor chips, to certain programs and not others◾ Our systems level approach and diversified portfolio which provides flexibility in responding
to OEM requirements◾ Business relations between us and each of our OEM customers◾ Our ability to supply products from multiple production locations for global vehicle platforms◾ Our capital allocation decisions◾ Competitiveness of our products, including in megatrend-aligned product areas◾ Exclusivity of our products due to certain intellectual property rights◾ OEM cooperation and consolidation◾ Our ability to grow sales to newer EV OEMs that achieve significant commercial success◾

Magna Content on Specific
Programs or Platforms◾

OEM outsourcing strategy, as well as their supplier preferences and relationships
Our ability to supply products from multiple production locations for global vehicle platforms◾ Our systems level approach and diversified portfolio which provides flexibility in responding
to OEM requirements◾ Our capital allocation decisions◾ Technological, visual, haptic, and other features/attributes of our products compared tocompeting products or the overall cost of such products to the end consumer◾ Pricing of our products relative to competing products◾ Perception/reputation for product quality, as well as timeliness of delivery◾ Our product engineering capabilities◾ Our ability to finance pre-production engineering costs◾ The scope of our authority relative to the OEM, regarding sourcing of sub-components or◾

Magna International Inc.

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Growth Driver

Factors Potentially Impacting Growth Driverproducts which are incorporated into the systems which we supply◾ Consumer “take rates” for products we sell
◾ Collaboration among our Operating Groups◾ Our ability to meet OEM customers’ sustainability/ESG criteria embedded in their sourcing

decisions for requirements for specific programs, including growing requirements regarding
the use of ‘green’ materials for specific programs
Legislative/regulatory trends
promoting sustainability and safety◾

Regulatory actions towards mandating higher fuel efficiency, lower carbon emissions and/or
enhanced safety features◾ Rise in the number of jurisdictions committing to, or accelerating existing commitments to,phase-out of the sale or registration of new ICE engines over the medium- to long term,
which could accelerate OEM development of non-ICE vehicles

Ma croecon omi c, Pol i ti ca l a nd O t h e r Tr e n d s
The global automotive industry is cyclical and, as noted above, vehicle production and/or sales may be affected by a broad range ofmacroeconomic, political, and other factors. Some such factors which are currently affecting the industry are discussed below.
Macroeconomic, Political & Other Trends

Description

Potential Impact on Magna

Inflationary Price Increases◾

Global markets currently experiencing
elevated inflation◾ Inflationary pressures remained in 2023
and have continued into 2024◾

Elevated Interest Rates◾

Increasing global inflation rates havespurred a cycle of monetary policy
tightening, including through central
bank increases to key short-term
lending rates◾ Availability and cost of credit are bothfactors affecting consumer confidence,
which is a critical driver of vehicle sales
and thus automotive production◾

Supply Chain Disruptions

◾

◾

10

Annual Information Form

Supply chain disruptions, including thecontinued impact from the global
shortage of semiconductor chips thathas materially affected global
automotive production volumes since2020 and may continue having some
impact in 2024
◾ Supply chain disruptions caused bygeopolitical conflict◾ Supply chain disruptions caused byextreme weather events growing infrequency

Higher operating costs, including for:commodities; energy; labour; freight;
and other production inputs; which may
potentially be unrecoverable from
customers◾ Longer-term increases in cost structure
as a result of recent increases in wage
levels◾ Sub-supplier pricing pressures which
may not be recoverable throughcontinuous improvement actions,customer recoveries, modifications to
our products or otherwise
Lower sales as a result of a decrease in
consumer demand for vehicles, and in
turn, lower production◾ Higher borrowing costs, at a time when
our aggregate debt level is increasing tofinance higher capital expenditures inconnection with program awards andour continued growth, including inmegatrend areas
Lower sales
Unrecoverable price increases◾ Elevated unrecoverable costs such as
those for premium freight or re-sourcingof supply◾ Significant production inefficiencies
from our production lines being
stopped/restarted◾ Penalties or business interruption claims
from customers◾ Loss of future business◾ Reputational damage◾ Higher inventory levels◾ Pricing pressures from sub-suppliers
negatively impacted by production
inefficiencies, premium freight costs
and/or other costs and surcharges◾ Challenges in retaining employees due
to production volatility◾ Financial stress on supply base◾

Macroeconomic, Political & Other Trends

Description

Potential Impact on Magna

Geopolitical Conflicts◾

Current military conflicts in Ukraine andGaza◾ U.S./China relations◾ Political pressure to manufacture andsource from countries that are
geopolitical allies◾

Economic/political uncertainty◾

Deterioration of consumer confidence,
including as a result of:◾ Impact of elevated levels of inflation◾ Impact of elevated long-term interest
rates◾ Direct/indirect impacts of geopoliticalevents, including military conflicts◾

Accelerating focus on impact of climatechange◾

Acceleration of government regulation
banning the sale of new vehicles withICE engines by certain future dates◾ Governmental authorities, customers,
equity investors, lenders, rating
agencies, employees and otherstakeholders increasing scrutiny ofcompanies’ impact on and resilience toclimate change◾ Focus on energy reduction andtransition to renewable / carbon neutralenergy sources◾ Increasing expectations regarding
disclosures of ESG metrics◾ Growth in investment demand forcompanies demonstrating sustainablestrategy and operations◾ Heightened focus and concern on riskof supply chain disruptions fromclimate-related events◾

Localization of production◾

◾

Pressure on OEMs to localize
production of vehicles in markets inwhich they are sold
◾ Potential to reduce costs and mitigate
risks associated with longer supply
chains◾ Tier 1 Suppliers also increasing
localization to meet demands of local
market and pace of new products◾ However, some of the China-based,
EV-focused OEMs and Vietnam’s
VinFast are exporting vehicles produced
domestically into Europe and North
American markets

Potential creation of risks, including:◾ Disruption of energy supplies(particularly natural gas and oil),shipping/transportation and logistics,
vehicle production and/or supply
chains;◾ Weaking of economic growth andconsumer confidence; and◾ Increasing physical and cybersecurity
threats◾ Potential worsening of current risks,
including:◾ inflationary pressures;◾ Commodities prices;◾ Relative foreign exchange rates; and◾ Risks of doing business in foreign
markets
Potential for lower vehicle sales, andthus lower production volumes◾ Planning and investment uncertainty◾ Increasing risk of pricing pressure from
OEMs and increasing financial stress on
supply base
◾ Potential impact on our sales andprofits
Opportunities from product strategyaligned with sustainable goals◾ Potential energy reduction opportunities
could reduce operating costs◾ Decarbonization strategies /commitments could require increased
capital spending and/or involve higher
operating costs, including higher costs
to purchase renewable energy◾ Potential for increased / decreased
demand for Magna’s Common Shares,
based on market views as tosustainability of the company◾ Risk of disruption to automotive supply
chains, transportation routes andelectricity grids from climate-related
eventsPlanning and investment uncertainty
Potential incentives for expansion into
local markets◾ May result in new opportunities for
Magna in markets where we haveavailable capacity or are wellestablished◾ Could also result in duplication of
capacity across markets◾

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Ind u str y Tre n d s
The automotive industry is being defined by a number of global megatrends that have shaped our long-term strategy, including:
Megatrend

Impact on Automotive

Globalization

Industry built through globalization appears to be undergoing regionalization

Environmental Impact

Concern for environment/climate change driving vehicle electrification,
including through acceleration of sustainability-related legislation

Natural Resources & Energy

Access to critical battery minerals and availability of sufficient renewableenergy may define success of drive to vehicle electrification

Demographic Change

Product design will be influenced by aging population

Digital Transformation

Connectivity and digitization impact both product and process. New vehiclearchitectures that connect the subsystems along with software functionality
creates additional value to products. Process is also impacted due toincreased digitization, driven by increased requirements for productivity andquality

Individualism

Product design will be influenced by growing individualism, including desire
for greater personalized experiences

Health & Well-Being

Active Driver Assistance Systems (“ADAS”) and autonomy take rates will be
driven both by consumer preferences as well as regulatory requirements tied
to increased safety

Urbanization

Continued growth in urban population will lead to changes in mobility as aresult of increased density and congestion with an increase in EV adoption
and new transport modalities

New Mobility

Emerging new mobility eco-system offers a range of potential opportunities
for new products and services, including automated delivery and mobility
solutions

EconomySociety

Mobility

These global megatrends and other factors are driving a number of industry trends, which are discussed below together with their potential
impact on Magna.
Automotive Industry Trends

Description

Potential Impact on Magna

Continuing focus on reducing
vehicle’s energy consumption
and CO2 emissions

◾

◾

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Sustainability considerations and regulatory
action, resulting in push for more efficient,cleaner, and smaller-displacement engines◾ Trend toward electrified vehicles drives demand
for solutions to help extend driving range fromsingle battery charge

Continuing opportunities to support OEM
customers’ efforts through lightweighting,more efficient drivetrains, electrification, andactive aerodynamics◾ Magna’s diversified portfolio supports bothtransition to EV, as well as traditional vehiclearchitectures — positioning Magna toproactively manage the speed of thetransition to EVs

Automotive Industry Trends

Description

Potential Impact on Magna

Demand for electric and hybrid
vehicles, as well as investment
in vehicle electrification◾

Sustainability considerations and regulatory
actions, including mandatory phase-outs of thesale or registration of new ICE vehicles in the
future, driving increased emphasis onelectrified powertrains◾ Interest in electrified solutions, especially inEurope and China◾ Significant development and engineering costs
for OEMs may drive increased outsourcing to
suppliers and increased collaboration among
OEMs◾ Number of EVs sold globally growing, but rateof growth has moderated in some markets witha misalignment between EV production/supply
and consumer demand for certain models◾

Continued growth in demandfor driver assistance/active
safety systems◾

Growth in demand for driver assistancefeatures/active safety systems driven bytightening safety regulations and continued
growth in demand for luxury segment vehicles◾

Disruption by new industry
entrants offering “mobility as aservice” (“MaaS”)◾

Growth of ride hailing and ride sharing services
in urban areas◾ Potential substitute for personal mobility
vehicles, particularly in congested urban
centres◾ May result in lower production volumes ofvehicles from traditional OEMs◾

Opportunities to grow Magna content andsales in areas such as drivetrain products
and battery enclosures◾ Strong level of investment required to growor maintain market share could impact shortterm financial performance◾ Potential non recovery of certain capital
investments if planned production volumes
do not materialize due to EV production/
sales misalignment◾ Pricing pressure on, and migration of value
away from, traditional products in order forOEMs to accommodate cost of battery
systems and electrified products◾ Quoting risk and technology risks, as wellas lack of warranty experience withelectrified products◾ Increased competition, including from newmarket entrants providing electrified
solutions◾ Potential risk of OEMs in-sourcing a greater
proportion of EV components and systems
production◾ Potential long-term displacement of somemechanical products where there arealternative electrified solutions◾ Potential challenges in attracting andretaining highly skilled engineering andsoftware personnel
Opportunity to grow Magna content andsales, particularly in ADAS products◾ Continued expenditures for growth in ADAS
required to develop Magna’s autonomous
driving capabilities could impact short-term
financial performance◾ Quoting risk and technology risks, as wellas lack of warranty experience with ADAS
products◾ Potential challenges in attracting andretaining highly skilled engineering andsoftware personnel
Alternative revenue streams or new
business opportunities for full-vehicle
engineering and manufacturing, as well as
additional service offerings◾ Potential loss of business with traditionalOEMs, to the extent MaaS adversely
impacts OEMs
◾ Potential risks relating to conducting
business with new MaaS entrants that may
have limited operating history, as well as
financial, liquidity/capital, or other resources◾ Uncertainty with respect to volume of new
MaaS product offerings creates risks
relating to recovery of engineering/capital
investments

Magna International Inc.

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Automotive Industry Trends

Description

Potential Impact on Magna

Emergence of newer
EV-focused OEMs◾

Trend towards vehicle electrification has led tothe emergence of EV-focused OEMs◾

Accelerating demand forconnected vehicles◾

Growing demand to include connectivity
features in vehicles driven by pervasiveness ofdigitalization in consumer’s daily lives◾ Personalization of end user functionality invehicle experience◾ Growth in vehicle architectures that connect
subsystems and include software functionality◾

Significant R&D spending

◾

◾

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Large-scale OEM and Tier 1 Supplierinvestments to comply with tightening
emissions regulations◾ Significant spending by OEMs, new market
entrants and Tier 1 Suppliers on vehicle
autonomy systems and new mobility solutions◾ May drive increased collaboration among
OEMs

Potential for cooperative relationships andnew business opportunities with new EV
entrants◾ Potential risks relating to conducting
business with newer OEMs that may have
limited: operating history, as well as
financial, liquidity/capital, or otherresources; as well as untested businessmodels◾ Uncertainty regarding consumer
acceptance of EVs, particularly those madeby new OEMs
◾ Potential risks of non-recovery of preproduction and production receivables;
inventory; fixed assets and capitalized
pre-production expenditures; and third party
obligations related to such items◾ Uncertainty regarding which newer OEMs
will succeed in the long-term creates
potential customer and/or partnership risk
◾ Failure to grow with those newer OEMs that
achieve commercial success could impact
our long-term strategy
Opportunities to grow Magna high-value
content, particularly given our systems
capabilities◾ Potential for establishment of new businessmodels, including software as a service◾ Potential challenges in attracting andretaining highly skilled engineers andsoftware personnel◾ Potential product cybersecurity risks related
to vehicles connected to external networks,
which could impact consumer adoption ofconnectivity related products/systems
Pricing pressure on, and migration of value
away from, traditional products in order forOEMs to accommodate cost ofelectrification, as well as active safety /autonomous features◾ OEM inability to achieve planned sales
volumes for electrified vehicles could impact
suppliers’ ability to recover pre-production
costs◾ Technical challenges to commercialize newtechnologies in ADAS
◾ Intense competition from established andnew market entrants◾ Risks related to establishing andmaintaining intellectual property rights,
including potential challenges to intellectual
property ownership

Automotive Industry Trends

Description

Potential Impact on Magna

Continuing elevated productwarranty expectations andproduct recall levels◾

Over the last decade, OEMs have become
more inclined to recall vehicles with potentially
faulty products◾ Increased frequency and severity of recalls,
together with other factors, have impacted
coverage and pricing for recall insurance◾

OEM cooperative alliances /consolidation◾

Joint platform development, powertrain
sharing, and/or purchasing◾ Regional joint ventures◾ Partnerships expanding to new areas of vehicle
ecosystem (raw materials/batteries;
components/software; infrastructure/aftersales)◾ OEM consolidation from time to time◾

Long-term growth of Chinese
OEMs and suppliers aided by
China’s accelerated focus on
vehicle electrification◾

Lower cost base of Chinese OEMs on EVs
could provide advantage for expansion into
global markets◾ Large number of Chinese OEMs and excess
production capacity could result inconsolidation◾ Certain Chinese OEMs targeting expansion into
North America and Europe◾

Chinese policies aimed at
growing high-value domestic
development/production◾

Chinese government plans to increaseengineering, development and manufacturingof high-value, high-tech products in China◾

Growth of “best-cost”
automotive markets◾

Growth of “best-cost” automotive markets,
which are close to larger establishedmanufacturing markets◾ Migration of manufacturing from traditional
automotive markets such as the U.S., Western
Europe◾

Increased OEM pricing pressure, includingpressure to assume greater warranty
responsibility◾ Increasing product recall claims and related
product replacement cost risk, even whereroot cause is not agreed with OEM or
cannot be determined◾ Higher self-insured retentions and, reduced
coverage limits on recall insurance, as wellas increased reluctance by certain subsuppliers to absorb the full cost of warranty/
recall expenses relating to the failure of theircomponents, create greater net exposure
Increased OEM pricing pressure
Increase in sales, where Magna has strong
relationship with lead OEM◾ Decrease in sales, where Magna has
weaker relationship with lead OEM◾

New business opportunities, including
drivetrain, electronics and ADAS products,
and full vehicle engineering and assembly◾ Potential loss of business with traditionalOEMs, to the extent new OEMs adversely
impact traditional OEMs
◾ Vertical integration risk as a result ofChinese OEMs having a financial /ownership interest in certain suppliers◾ Potential for consolidation, and/or new
partnerships and collaborations
Increased localization of engineering,development, and manufacturing◾ Uncertainty regarding whether Chinese
domestic companies will be preferred overforeign-owned companies operating in
China◾ Potential for increased export control
restrictions in the U.S. and Western Europe
relating to strategically important and/or
technologically advanced products andtechnology
Potential new “best-cost” market forengineering talent◾ Increased level of investment in newmarkets required◾ Various risks of doing business in foreign
markets

Magna International Inc.

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Ou r Corporate S tr a teg y
We have distilled the impacts of the global megatrends into four long-term strategic factors which we see defining the “Car of the
Future” – electrification, autonomy, new mobility, and connectivity. We believe we are well-positioned to capitalize on opportunities in eacharea:
We possess an enhanced e-Powertrain portfolio with a range of products that addresses the roadmap for the transition
to EVs. We continue to win new EV business.

We possess full ADAS capability and complete ADAS system expertise. We take a systems level approach in developing
ADAS building blocks for OEM customers with a focus up to level 2+/3 ADAS capabilities.

We have expanded our collaboration ecosystem and continue to look at opportunities to leverage new business models.
The breadth of our capabilities make us a key enabler of OEM customers and new entrants in the New Mobility space.

We possess software-enabled functionality in our electronic control unit-related products. This functionality could help
optimize performance and efficiency in connected products, such as our connected powertrains.

We have developed our corporate strategy to realize the opportunities from these trends. Key elements of such strategy include:
1 . I n c re a sin g c a p i t a l d e p l o y m e nt t o w a rd hi g h - g ro wth a re a s a lig n e d with th e “Ca r o f th e Fu ture”
We are proactively managing our portfolio and evolving our product mix based on alignment with the Car of the Future which we see aselectrified, connected, assisted/autonomous, personalized, and sustainable. We seek to grow our business and capabilities in areas which
are positively impacted by the global megatrends discussed earlier through an approach that emphasizes functionally integrated solutions,systems development, and cross-Operating Group collaboration. Examples of such areas include powertrain electrification, ADAS andbattery enclosures, as well as our contract vehicle manufacturing operations. As illustrated below, we believe that a substantial proportionof our product areas are not adversely impacted by the global megatrends, including our body, chassis, lighting, active aerodynamics, dual
clutch transmissions, mirrors, mechatronics, and seating products.

Impact of Megatrends

Magna Sales over time
Positive • eDrives and Components
Impact • Battery Enclosures••••
Aligned ••••Active Safety

Lighting
Active Aerodynamics
Body & Chassis
Dual Clutch Transmissions
Mirrors
Mechatronics
Seating

Negative • Manual Transmissions
Impact • 4WD/AWD•

Fuel Tanks

Complete Vehicles

2020

FUTURE

Lastly, there are elements of our product portfolio which are negatively impacted by the global megatrends and are expected to be lessdirectly relevant to the Car of the Future. Examples of such products include manual transmissions, mechanical AWD/4WD systems and fueltank systems. Despite their declining long-term strategic importance, our assets and expertise associated with these products remain
relevant to, and can be redeployed for, growing product areas aligned with the Car of the Future.
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2 . Dr iv in g O p e ra t i o na l E xc e l l e nc e
We are committed to manufacturing excellence. We continue to elevate our approach to manufacturing by implementing “factory of the
future” initiatives including: enhanced use of big data and analytics; digitization; advanced robotics; additive manufacturing; and augmented
reality. The ultimate goal is to achieve greater profitability through further enhanced quality, production efficiency, reduction of floor space
and improved return on investments. Critical elements of our approach to operational excellence include our Factory of the Future initiatives
and MAFACT operating system, which are discussed in “Section 6 – Description of the Business – Manufacturing & Engineering” in this AIF.
Additionally, our sustainability strategy dovetails with our efforts around operational excellence, due to the focus on energy optimization andminimization of water withdrawals, as well as waste streams to landfill. Details of our approach to Sustainability, including emissions, energy,
water, and waste reduction targets, can be found in our Sustainability Report, which is Appendix 1 to this AIF.
3 . Unlo c k in g N e w B us i ne s s M o d e l s a nd M a r ke ts
The new mobility landscape, which is generally urban, electrified, autonomous and connected, is creating new business models andmarkets. We believe that our systems and complete vehicle knowledge, including elements of our portfolio such as EV and ADAS platforms,
provide us with an advantage in pursuing such opportunities. In addition, our ability to use capital efficiently, launch programs reliably andhelp speed products to market, makes Magna a key enabler of new entrants. Additionally, we are using our capabilities and platform
technologies to enter the micromobility market. For example, we invested in the Yulu electrified two-wheeler shared mobility business inIndia and related battery-swapping business and have a number of activities underway involving Magna-developed and third partydeveloped robots for potential industrial and last-mile delivery applications.

Magna International Inc.

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5 . R i s k Fa c t o r s
The industry in which we compete and the business we conduct are subject to a number of risks and uncertainties. Our short andmedium-term operational success, as well as our ability to create long-term value through our corporate strategy, are subject to a numberof risks and uncertainties. These risks and uncertainties, together with a number of assumptions, underlie the forward-looking statements
made in this AIF. In order to fully understand these risks, uncertainties, and assumptions, you should carefully consider the following risk
factors in addition to other information included in this AIF:

Macroeconomic, Geopolitical and Other Risks◾

Inflationary Pressures: We continue to experience elevated inflation in all markets in which we operate, with higher commodity, energy,
labour, freight, and other production input pricing expected to persist in 2024. While many of these input price increases will moderateover time, the increases in wage levels we are currently experiencing are likely to have a longer-term effect on our cost structure.
Additionally, we may continue to experience price increases or surcharges from sub-suppliers in connection with the inflationary pressuresthey face. The inability to offset inflationary price increases, including through recoveries from our customers, modifications to our
products, continuous improvement actions or otherwise, could have a material adverse effect on our profitability.

◾

Interest Rates: Increasing global inflation rates have spurred a cycle of monetary policy tightening, including through central bankincreases to key short-term lending rates. The availability and cost of credit are both factors affecting consumer confidence, which is a
critical driver of vehicle sales and thus automotive production. A material, sustained decrease in consumer demand for vehicles could
result in further reductions to vehicle production from levels assumed in our business plan, which could have a material adverse effect on
our profitability and financial condition. Higher interest rates will have an adverse effect on our borrowing costs, and if prolonged, could
have an adverse effect on our profitability.

◾

Geopolitical Risks: The occurrence of geopolitical crises, including from the current military conflicts in Ukraine and Gaza, could create
a number of risks, including: disruption of energy supplies (particularly natural gas and oil), shipping/transportation and logistics, vehicle
production and/or supply chains; weakening economic growth and consumer confidence; increasing physical or cybersecurity threats;
and/or worsening other risks described elsewhere in these Risk Factors, such as inflationary pressures, commodity prices, relative
foreign exchange rates and risks of doing business in foreign markets. An expansion or worsening of existing geopolitical crises, or theoccurrence of significant new geopolitical risks, could have a material adverse effect on our business and operations.

Risks Related to the Automotive Industry◾

Economic Cyclicality: Ordinarily, the global automotive industry is cyclical, with potential for regional differences in the timing of
expansion and contraction of economic cycles. In normal industry cycles, lower consumer confidence typically translates to lower vehicle
sales and production volumes. Examples of factors which often reduce consumer confidence include: worsening economic, political,
and other conditions; military conflict; increasing inflation (particularly fuel and energy prices); and rising interest rates. A significant decline
in vehicle production volumes from levels assumed in our business plan could have a material adverse effect on our profitability andfinancial condition.

◾

Regional Production Volume Declines: North America, Europe and China are key automotive producing regions for us, and ouroperating results are primarily dependent on car and light truck production by our customers in these regions. A significant or sustained
decline in vehicle production volumes in any or all these geographic regions could have a material adverse effect on our operations, sales,and profitability.

◾

Deteriorating Vehicle Affordability: Vehicle affordability to consumers is becoming more challenged due to a combination of factors,
including: higher prices for electric vehicles (“EVs”); costs related to advanced electronic systems; increasing vehicle finance costs due torising interest rates; inflationary cost increases impacting the entire bill of materials for a vehicle; and, in some cases, limited vehicle
supply. A material, sustained decrease in consumer demand for vehicles due to deteriorating vehicle affordability could result in reductions
to vehicle production from levels assumed in our business plan, which could have a material adverse effect on our profitability andfinancial condition.

◾

Misalignment Between EV Production and Sales: The automotive industry is transitioning from vehicles powered by internal
combustion engines (“ICE”) to EVs, resulting in significant, industry-wide capital investment in EV-related production capacity. At thesame time, there remains some uncertainty as to consumer acceptance of EVs due to issues such as vehicle affordability; availability of
government subsidies; concerns regarding evolving battery technologies; anxiety regarding driving range; adequacy of charging
infrastructure; the proliferation of new, EV-focused OEMs and/or new EV models with little or no operating and warranty history; and otherfactors. Although the number of EVs sold globally is growing, the rate of growth has moderated in some markets, with a misalignment
between EV production/supply and consumer demand for certain models. If planned production volumes for EV programs do notmaterialize, we may not be able to recover our capital investments related to such programs, or to recover such investments within thetimeframes contemplated.

◾

Intense Competition: The automotive supply industry is highly competitive and becoming more so. Some of our competitors havehigher or more rapidly growing market share than we do in certain product or geographic markets. Additionally, a number of established18

Annual Information Formelectronics, semiconductor chip and contract manufacturing companies have entered or expanded their presence in the automotive
industry. At the same time, disruptive technology innovators have been introducing novel product and service solutions which traditional
automotive suppliers may not be able to match. Failure to successfully compete with existing or new competitors, including failure to
grow our electronics and/or EV content at or above the industry rates of growth for such products, could affect our ability to fully
implement our corporate strategy.

Strategic Risks◾

Alignment With “Car of the Future”: The success of our corporate strategy is correlated in part to our ability to evolve our product mix
based on alignment with global megatrends defining the “Car of the Future.” Accordingly, we seek to grow our business and capabilities
in areas which are positively impacted by megatrends related to vehicle electrification, autonomy, new mobility, and connectivity. Examples
of such product areas include powertrain electrification, ADAS and battery enclosures. Some systems in our product portfolio are
negatively impacted by the foregoing megatrends, including manual transmissions, mechanical all-wheel drive/four-wheel drive systems
and fuel tank systems. The failure to grow our megatrend-aligned product areas at or above the industry rates of growth for suchproducts could have a material adverse effect on our profitability and financial condition.

◾

Evolving Business Risk Profile: The risk profile of our business continues to evolve with the increasing importance to us of productareas such as electrified powertrains and ADAS. With this continuing evolution, we may face new or heightened risks, including:forecasting and planning risks related to penetration rates of EVs, as well as take-rates for ADAS or features offered to consumers as
optional items; reduction in demand for certain products which are unique to internal combustion engine vehicles; challenges in quoting
for profitable returns on products with leading-edge technologies and/or new service models for which we may not have significant
quoting experience; rigorous testing and validation requirements from OEM customers for complex new products; increased warranty
and recall risks on new products and leading-edge technologies; increased product liability risks; heightened risk of technologicalobsolescence of some of our products, processes and/or assets; and difficulties in attracting or retaining employees with critical skills inhigh-demand areas. Realization of one or more such risks could have a material adverse effect on our operations, profitability, or financial
condition.

◾

Technology and Innovation: While we continue to invest in technology and innovation which we believe will be critical to our long-term
growth, the automotive industry is experiencing significant electrical, electronic, and software-driven change and disruption. Our ability toanticipate changes in technology and to successfully develop and introduce new and enhanced products and/or manufacturing
processes on a timely basis will be significant factors in our ability to remain competitive. Additionally, our success is dependent on ourability to attract, develop and retain employees with the required technical and/or software skills. If we are unsuccessful or are lesssuccessful than our competitors in consistently developing innovative products and/or processes, we may be placed at a competitive
disadvantage in bidding for new business and may not be able to recover some or all our engineering, research and development costs,
which could have a material adverse effect on our profitability and financial condition and ability to fully implement our corporate strategy.

◾

Investments in Mobility and Technology Companies: In addition to our development activities, we have invested in various mobility
and technology companies, as well as funds that invest in such companies. Such investments are an important element of our long-term
strategy, and we may make further investments in such companies. However, investing in such companies involves a high degree of risk,
including the potential loss of some or all our investment value. There is currently no public market for the shares or units of some of theseinvestments and, as a result, we may be unable to monetize such investments in the future. In some cases, we have shares or sharepurchase warrants with technology-driven suppliers or OEMs with which we have commercial supply relations; while the value of such
equity may be affected by the commercial prospects of such programs, our ability to exit our investments may be impaired by theexistence of our commercial supply relationship. Investments in companies or funds which are currently or subsequently become publicly
traded are “marked-to-market” quarterly, which may result in us recording unrealized gains or losses in any given quarter. The realizationof any of the foregoing investment-related risks could have an adverse effect on our profitability and financial condition.

Customer-Related Risks◾

Customer Concentration: Although we supply parts to all the leading OEMs, a significant majority of our sales are to six customers:
General Motors, Mercedes-Benz, BMW, Ford, Stellantis, and Volkswagen. In light of the amount of business we currently have with thesesix customers, our opportunities for incremental growth with them may be limited. Additionally, growth rates of OEMs differ by region andsegment, with significant growth by some EV-focused OEMs in certain markets. Shifts in market share away from our top customers
could have a material adverse effect on our profitability to the extent we are unable to offset such lost sales with sufficient sales growthwith alternative OEMs.

◾

Growth with Asian OEMs: The amount of business we have with Japanese, Korean and Chinese-based OEMs generally lags with thatof our six largest customers, due in part to the existing relationships between such Asian OEMs and their preferred suppliers. Our inability
to significantly grow our business with Asian-based OEMs could have an adverse effect on our profitability.

◾

Growth of EV-Focused OEMs: The number of EV-focused OEMs has increased in recent years but it remains too early to predict whichof the other EV-focused OEMs will succeed globally. Some of the China-based, EV-focused OEMs, such as BYD and Geely, are entering
the European market with vehicles exported from China, while VinFast has entered both the European and North American markets with
Magna International Inc.

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vehicles exported from Vietnam. Vehicle electrification is an important component of our strategy, including through product areas suchas electric drive systems and battery enclosures, as well as services such as complete vehicle engineering and contract vehicle
manufacturing. While we are targeting growth with some of the newer EV-focused OEMs, we do not have relations with all, nor are such
relationships as well established as those with our traditional customers. The failure to sufficiently grow our sales to those EV-focused
OEMs which achieve significant commercial success could adversely impact our long-term strategy. At the same time, the failure ofnewer EV-focused OEMs to which we supply systems or vehicles to achieve their sales projections could adversely impact the successof our customer diversification and electrified product strategies, as well as create counterparty risks described below.
◾

Risks of Conducting Business with Newer EV-Focused OEMs: Conducting business with newer EV-focused OEMs continues toalter the risk profile of our business and poses incremental risks and challenges compared to our traditional customers, including as aresult of: their relatively short operating histories; limited financial, liquidity/capital or other resources; less mature product development
and validation processes; uncertain market acceptance of their products/services; and untested business models. These factors mayelevate our counterparty risks in dealing with such OEMs, particularly with respect to recovery of: pre-production (including tooling,
engineering, and launch) and production receivables; inventory; fixed assets and capitalized pre-production expenditures; as well asother third party obligations related to such items. The inability of newer EV-focused OEMs to achieve commercial success, or thebankruptcy or insolvency of any such OEM with which we conduct business, could have a material adverse effect on our profitability andfinancial condition.

◾

Fisker’s Ability to Continue as a Going Concern: On February 29, 2024, Fisker Inc. (“Fisker”) raised substantial doubt as to its ability
to continue as a going concern. As a result of Fisker’s subsequent inability to secure new financing, it may seek bankruptcy protection to
restructure its business and operations which could have a material adverse effect on our financial condition and/or profitability, as
follows:
Financial Condition: Our Operating Groups and Divisions had exposure to Fisker pre-production (including tooling, engineering, andlaunch) and production receivables; inventory; fixed assets and capitalized preproduction expenditures; as well as other third-party
obligations related to such items of approximately $450 million and $300 million as at December 31, 2023, and March 20, 2024,
respectively. In addition to such amounts, we hold share purchase warrants in Fisker which are “marked-to-market” quarterly in Other
Expense (Income). Based on the last trading price of Fisker shares, we expect to record a $35 million charge related to these warrants inthe first quarter of 2024. Finally, when the warrants were issued, and the vesting provision realized, we recorded an offsetting amount todeferred revenue which is not marked-to-market but rather amortized to operating income as Fisker vehicles are produced and delivered.
The unamortized amount of deferred revenue as of March 20, 2024, was approximately $195 million. Based on the above, and dependent
on the outcome of a Fisker bankruptcy, insolvency, or restructuring plan, if any, we will be required to record an impairment charge in
Other Expense in the range of approximately $140 million to $335 million.
Profitability: On February 9, 2024, we issued an Outlook that assumed production volumes of the Fisker Ocean SUV at our facility in Graz,
Austria of approximately 20,000 units and 30,000 units for 2024 and 2026, respectively. Our 2024 sales outlook included consolidated
sales associated with such Fisker production volumes of approximately $425 million, comprised of $200 million of assembly sales(including from fixed cost recoveries) and $225 million for the sale of systems and components. If Fisker is unable to meet its contractual
commitments to Magna, the negative impact to our 2024 consolidated Adjusted EBIT margin is expected to be approximately 25 basis
points, excluding the cost of any restructuring actions.

◾

Dependence on Outsourcing: We depend on outsourcing by OEMs, including the outsourcing of complete vehicle assembly to ourcontract vehicle manufacturing business. The extent of such outsourcing is dependent on a number of factors, including: the cost,quality, and timeliness of outsourced production relative to in-house production by an OEM; the degree of unutilized capacity at an
OEM’s facilities; and collective bargaining agreements and labour relations between OEMs and labour unions. Currently, OEMs in Europe
and China have excess vehicle assembly capacity. Additionally, since EVs have fewer components than vehicles with internal combustion
engines, some OEMs may insource production of certain components or systems to maintain employment levels committed to incollective bargaining agreements and/or in connection with government incentives. A reduction in outsourcing by OEMs, or the loss ofany material production or assembly programs combined with the failure to secure alternative programs with sufficient volumes andmargins, could have a material adverse effect on our profitability.

◾

Customer Cooperation and Consolidation: Competing OEMs have cooperated and collaborated in different ways to save costs,
including through: joint purchasing activities; platform sharing; powertrain sharing; joint R&D; and regional joint ventures. Additionally, theautomotive industry has experienced OEM consolidation, with the last material example being the merger of Fiat Chrysler Automobiles
and PSA Group in 2021. While OEM cooperation and consolidation may present opportunities, they also present a risk that we could lose
future business or experience even greater pricing pressure on certain production programs, either of which could have an adverse effecton our profitability.

◾

Market Shifts: While we supply parts for a wide variety of vehicles produced globally, we do not supply parts for all vehicles produced,
nor is the number or value of parts evenly distributed among the vehicles for which we do supply parts. Shifts in market shares away fromvehicles on which we have significant content, as well as vehicle segments in which our sales may be more heavily concentrated, could
have a material adverse effect on our profitability.

20

Annual Information Form◾

Consumer Take Rate Shifts: Shifts in consumer preferences may impact “take rates” for certain types of products we sell. Examples
of such products include: all-wheel drive systems; power liftgates; active aerodynamics systems; ADAS; and complete vehicles withcertain option packages or option choices. Where shifts in consumer preferences result in higher “take rates” for products that we do notsell or for products we sell at a lower margin, our profitability may be adversely affected.

◾

Quarterly Sales Fluctuations: Our business is generally not seasonal, but our sales and profits are closely related to our automotive
customers’ vehicle production schedules. Our largest customers typically shut down vehicle production for brief periods which fall during
our third and fourth fiscal quarters. These scheduled shutdowns of our customers’ production facilities could cause our sales andprofitability to fluctuate when comparing fiscal quarters within any given year.

◾

Customer Purchase Orders: Contracts from our customers consist of blanket purchase orders which generally provide for the supply
of a customer’s annual requirements rather than a specific quantity of products and can be terminated by a customer at any time. We
may have various pre-production, tooling, engineering, and other costs which cannot be recovered from our customers if a purchaseorder is terminated and/or if forecast production volumes fail to materialize. The failure to recover such costs could have an adverse effecton our profitability.

◾

Potential OEM Production-Related Disruptions: Any significant OEM production disruptions, including as a result of labour unrest at
customer or sub-supplier facilities, would lead to disruptions to our production, which could have a material adverse effect on our sales,and profitability.

Supply Chain Risks◾

Semiconductor Chip Supply Disruptions and Price Increases: A global shortage of semiconductor chips for use in automotive
applications has had a material adverse effect on global automotive production volumes since 2020 and may continue having some
impact in 2024. In response to semiconductor chip shortages, OEMs may continue to take actions such as: unplanned shutdowns of
production lines and/or plants; reductions in their vehicle production plans; and changes to their product mix. Such OEM responses canresult in a number of direct and indirect consequences for Tier 1 suppliers like Magna, including: lower sales; significant production
inefficiencies resulting from our production lines being stopped/restarted unexpectedly when OEMs’ allocate scarce chips to specificproduction programs; higher inventory levels; premium freight costs to expedite shipments; other unrecoverable costs and charges,
including from sub-suppliers which have been adversely affected by higher chip prices and/or production inefficiencies; and increased
challenges in retaining employees through production disruptions. Although supplies of semiconductor chips are significantly better thanin the last two years, it remains unclear when supply and demand for automotive semiconductor chips will fully rebalance. A worseningor prolongation of the semiconductor chip shortage could have a material adverse effect on our operations, sales, and profitability.

◾

Supply Chain Disruptions: In addition to the global shortage of semiconductor chips for automotive applications, OEMs and Tier 1
automotive suppliers may also experience supply disruptions or constraints on other critical manufacturing inputs, for a number ofdifferent reasons, including: government regulation or intervention; geopolitical and/or military conflict; interruption of shipping or othertransportation routes; natural catastrophes; labour disruptions; and pandemics. Supply chain disruptions which prevent us from timely
supplying products to our customers could result in a range of potential adverse consequences, including: unrecoverable price increases;
elevated, unrecoverable costs such as those for premium freight or re-sourcing of supply; penalties or business interruption claims by ourcustomers; loss of future business; and reputational damage. The impacts of prolonged supply chain disruptions or constraints could
have a material adverse effect on our operations and profitability.

◾

Regional Energy Supply and Pricing: Regional energy supplies have from time to time been disrupted due to geopolitical and military
conflict, supply/demand imbalances, government regulation, severe weather events, and challenges related to the transition to renewableenergy generation. Unforeseen supply disruptions or demand spikes, prolonged energy disruptions and/or significant energy priceincreases could have a material adverse effect on our operations and profitability.

◾

Supply Base Condition: We rely on a number of suppliers to supply us with a wide range of components required in connection withour business. The financial health of automotive suppliers is impacted by a number of factors, including economic conditions andproduction volumes. A significant worsening of economic conditions or reduction in production volumes could deteriorate the financial
condition of our supply base, which could lead to, among other things: disruptions in the supply of critical components to us or ourcustomers; and/or temporary shutdowns of one of our production lines or the production lines of one of our customers; all of which could
have a material adverse effect on our profitability.

Manufacturing/Operational Risks◾

Product Launch: The launch of production is a complex process, the success of which depends on a wide range of factors, including:the timing and frequency of design changes by our customers relative to start of production; product maturity and complexity; production
readiness of our own, as well as our customers’ and suppliers’ manufacturing facilities; robustness of manufacturing and validation
processes; launch volumes; quality and production readiness of tooling and equipment; sufficiency of skilled employees; and initial
product quality. Failure by us to successfully launch a new product or complete vehicle could result in commercial or litigation claims
against us which could have a material adverse effect on our profitability. Additionally, a significant product or program launch failure
could adversely affect our reputation and/or ability to execute our strategy.
Magna International Inc.

21

◾

Operational Underperformance: From time to time, we may have operating divisions which are not performing at expected levels of
profitability. The size and complexity of automotive manufacturing operations often makes it difficult to achieve a quick turnaround ofunderperforming divisions. Significant underperformance in our operating divisions could have a material adverse effect on our profitability
and operations.

◾

Restructuring Costs: We may sell some product lines and/or downsize, close, or sell some of our operating divisions. By taking suchactions, we may incur restructuring, downsizing and/or other significant non-recurring costs. These costs may be higher in some countries
than others and could have a material adverse effect on our profitability.

◾

Impairments: We have recorded significant impairment charges related to equity interests in joint ventures, goodwill, and long-lived
assets in the past and may do so again in the future. The occurrence of any of a number of potential scenarios could result in indicatorsof impairment, including: the early termination, loss, renegotiation of the terms of, or delay in the implementation of, any significant
production contract; the technological obsolescence of any of our products or production assets; production volumes that are lower than
expected; and the insolvency of a customer. In conducting our impairment analysis, we make forward-looking assumptions regarding:the impact of turnaround plans on underperforming operations; new business opportunities; program price and cost assumptions on
current and future business; the timing and success of new program launches; and forecast production volumes. To the extent suchforward-looking assumptions are not met, any resulting impairment loss could have a material adverse effect on our profitability.

◾

Labour Disruptions: Some of our manufacturing facilities are unionized, as are many manufacturing facilities of our customers andsuppliers. While unionized facilities are subject to the risk of labour disruptions from time to time, we cannot predict whether or when any
labour disruption may arise, or how long such a disruption could last. A significant labour disruption could lead to a lengthy shutdown of
our or our customers’ and/or our suppliers’ production lines, which could have a material adverse effect on our operations and profitability.

◾

Skilled Labour Attraction/Retention: Our business is based on successfully attracting, training, developing, and retaining employees
at all levels of the company from “shop-floor” to Executive Management. The markets for highly skilled workers, as well as talented
professionals and leaders in our industry are extremely competitive, particularly in the major global automotive and technology centres inwhich many of our operations are located. The inability to meet our needs for skilled workers and talented professionals and leaders,
whether through recruitment or internal training and development activities could impact our ability to profitably conduct business and/or
effectively implement our strategy.

◾

Leadership Expertise and Succession: Effective succession planning programs and practices are a critical element of our overall
talent management strategy. We experienced a significant number of planned retirements in the last few years and may experiencesimilar waves in future years. As a result of such retirements, we have multiple senior leaders recently appointed to roles at a time ofsignificant macroeconomic, geopolitical, industry and other disruptions discussed elsewhere in these Risk Factors. While we believe that
our leadership development and succession program has been effective in facilitating leadership transitions to date, our ability to profitably
conduct business and/or successfully implement our strategy could be impacted by the failure to: identify, train, develop and support
high-performing leaders; ensure effective knowledge transfers from transitioning leaders to successors; and/or otherwise promoteorganizational robustness and resilience through leadership transitions in critical roles.

Pricing Risks◾

Quote/Pricing Assumptions: The time between award of new production business and start of production typically ranges between
two and four years. Since product pricing is typically determined at the time of award, we are subject to significant pricing risk due tochanges in input costs and quote assumptions from the time of award through the start of production. This risk is elevated in a rising
inflation environment, particularly with respect to wages, energy, and commodities. The inability to quote effectively, or the occurrence ofa material change in input cost or other quote assumptions between program award and production, could have a material adverse effecton our profitability.

◾

Customer Pricing Pressure/Contractual Arrangements: We face ongoing pricing pressure from OEMs, including through: quoting
pre-requirements; long-term supply agreements with mutually agreed price reductions over the life of the agreement; non-contractual
annual price concession demands; pressure to absorb costs related to product design, engineering and tooling, and/or amortize suchcosts through the piece price for the product; pressure to assume incremental warranty costs; and OEM refusal to fully offset inflationary
price increases. OEMs possess significant leverage over their suppliers due to their purchasing power and the highly competitive natureof the automotive supply industry. As a result of the broad portfolio of parts we supply to our six largest OEM customers, such customers
may be able to exert greater leverage over us as compared to our competitors. We attempt to offset price concessions and costs in a
number of ways, including through commercial negotiations with our customers, improved operating efficiencies and cost reduction
efforts. Our inability to fully offset price concessions, absorb design, engineering, and tooling costs, and/or fully recover such costs overthe life of production, could have a material adverse effect on our profitability. Moreover, while we attempt to negotiate contractual termswith our suppliers that align with the contractual terms between us and our OEM customers, we may not always be successful in doing
so. Any such gaps between our customer and supplier contract terms could, in certain circumstances, have an adverse effect on our
profitability.

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Annual Information Form◾

Commodity Price Volatility: Prices for certain key raw materials and commodities used in our parts, including steel, aluminum, andresin, can be volatile. In some cases, our risk is mitigated because we purchase steel or aluminum under customer resale programs.
Where such commodity purchases are not made under customer resale programs, we seek to offset commodity price increases by:passing such increases to our customers, engineering products with reduced commodity content, implementing hedging strategies, orotherwise. To the extent we are unable to offset commodity price increases, such additional commodity costs could have an adverse
effect on our profitability.

◾

Scrap Steel/Aluminum Price Volatility: Some of our manufacturing facilities generate a significant amount of engineered scrap steel
and/or aluminum in their manufacturing processes but recover some of the value through the sale of such scrap. Scrap steel and scrap
aluminum prices can also be volatile and do not necessarily move in the same direction as steel or aluminum prices. Declines in scrap
steel/aluminum prices from time to time could have an adverse effect on our profitability.

Warranty/Recall Risks◾

Repair/Replacement Costs: We are responsible for repair and replacement costs of defective products we supply to our customers.
Certain of our products, such as transmissions and battery enclosures, typically have a higher unit and labour service cost in the event of
replacement. Other products, such as cameras, radars, and side door latches, are supplied in multiples of two or four for a single vehicle,
which could result in significant cost in the event all need to be replaced. OEMs and/or government regulators can initiate recalls of safety
or regulated products, which could place us at risk for the administrative costs of the recall, in addition to the repair/replacement costs ofdefective products, even in situations where we dispute the need for a recall or the responsibility for any alleged defect. See the claim
disclosed in “Section 10 — Legal Proceedings” in this AIF. The obligation to repair or replace defective products could have a material
adverse effect on our operations and profitability. To the extent such obligation arises as a result of a product recall, we may face
reputational damage, and the combination of administrative and repair/replacement costs could have a material adverse effect on our
profitability.

◾

Warranty Provisions: In certain circumstances, we are at risk for warranty, product liability and recall costs. We are currently experiencing
increased customer pressure to assume greater warranty responsibility. Certain customers seek to impose partial responsibility forwarranty costs where the underlying root cause of a product or system failure cannot be determined, or where the root cause is disputed,
as in the case of a claim disclosed in “Section 10 — Legal Proceedings” in this AIF. Warranty provisions for our products are based on
our best estimate of the amounts necessary to settle existing or probable claims related to product defects. Warranty claims which
exceed warranty provisions could have a material adverse effect on our profitability. In addition, warranty provisions for our powertrainsystems, electronics and complete vehicle programs are also established based on our or our customers’ warranty experience with theapplicable type of product and, in some cases, the terms in the applicable customer agreements. Actual warranty experience which
results in costs that exceed our warranty provisions, could have a material adverse effect on our profitability.

◾

Product Liability: We cannot guarantee that the design, engineering, testing, validation, and manufacturing measures we employ toensure high-quality products will be completely effective, particularly as electronic content and product complexity increases and/or as
we enter newer product areas such as eDrives or ADAS. If our products fail to perform as expected or as required by governmental
regulations, and/or to the extent any such failure results in, or is alleged to result in, bodily injury and/or property damage or other losses,
our customers or government regulators may initiate a product recall of such products and/or third party product liability claims may bebrought against us. The defense of product liability claims, particularly class action claims in North America, may be costly and judgements
against us could impair our reputation and have a material adverse effect on our profitability.

Climate Change Risks◾

Transition Risks and Physical Risks: Our Sustainability Report, which is appended to this AIF, contains a detailed discussion oftransitional and physical climate change risks, along with our efforts to mitigate them. Readers are encouraged to review such climate risk
disclosures.

◾

Strategic and Other Risks: A number of the risk factors discussed above contain detailed discussion of strategic and other risks
related to the evolution of the automotive industry and our business within the context of the transition to electromobility, including:
Alignment with “Car of the Future”; Technology and Innovation; Evolving Business Risk Profile; Growth of EV-Focused OEMs; Risks of
Conducting Business with Newer EV-Focused OEMs; and Fisker’s Ability to Continue as a Going Concern. Readers are encouraged toreview this entire Risk Factors section in its entirety.

IT Security/Cybersecurity Risks◾

IT/Cybersecurity Breach: Although we have established and continue to enhance security controls intended to protect our IT systems
and infrastructure, there is no guarantee that such security measures will be effective in preventing unauthorized physical access or
cyber-attacks. A significant breach of our IT systems could: result in theft of funds; cause disruptions in our manufacturing operations;lead to the loss, destruction, or inappropriate use of sensitive data, including employees’ personal data; or result in theft of our, ourcustomers’ or our suppliers’ intellectual property or confidential information. The occurrence of any of the foregoing could adversely
affect our operations and/or reputation and could lead to claims against us that could have a material adverse effect on our profitability.
Magna International Inc.

23

◾

Product Cybersecurity: The risk of vehicle cyber-attacks has risen with the proliferation of technology designed to connect vehicles toexternal networks. Although vehicle and systems-level cybersecurity controls and protections are typically managed and/or specified by
our OEM customers, we cannot provide assurance that such controls and protections will be effective in preventing cyber intrusion
through one of our products. Furthermore, an OEM customer may still seek to hold us financially responsible, even where the OEM
specified the cybersecurity controls and protections. Any such cyber intrusion could cause reputational damage and lead to claims
against us that have an adverse effect on our profitability.

Acquisition Risks◾

Acquisition of Strategic Targets: We intend to continue to pursue acquisitions in those product areas which we have identified as key
to our long-term corporate strategy. However, as a result of intense competition in these strategic areas, we may not be able to acquire
the targets which we need to achieve our strategic objectives.

◾

Inherent Merger and Acquisition Risks: Acquisitions are subject to a range of inherent risks, including the assumption of incremental
regulatory/compliance, pricing, supply chain, commodities, labour relations, litigation, environmental, pensions, warranty, recall, IT, tax,
or other risks. While due diligence on an acquisition target is intended to mitigate such risks, these efforts may not always prove to be
sufficient in identifying all risks and liabilities related to the acquisition, including as a result of: limited access to information; time constraints
for conducting due diligence; inability to access target company facilities and/or personnel; or other limitations in the due diligenceprocess. Additionally, we may identify risks and liabilities that we are not able to sufficiently mitigate through appropriate contractualindemnities or other protections. The realization of any such risks could have a material adverse effect on our profitability.

◾

Acquisition Integration and Synergies: We may not be able to successfully integrate or achieve anticipated synergies from ouracquisitions and/or such acquisitions may be dilutive in the short to medium term. Either of these outcomes could have a material
adverse effect on our profitability.

Other Business Risks◾

Joint Ventures: We conduct certain of our operations through joint ventures under contractual arrangements under which we share
management responsibilities with our joint venture partners. Joint venture operations carry a range of risks, including those relating to:
failure of our joint venture partner(s) to satisfy contractual obligations; potential conflicts between us and our joint venture partner(s);strategic objectives of joint venture partners that may differ from our own; potential delays in decision-making; a limited ability to implement
some or all of our policies, practices and controls, or to control legal and regulatory compliance, within the joint venture(s); and other risks
inherent to non-wholly owned operations. The likelihood of such occurrences and their potential effect on us vary depending on the joint
venture arrangement, however, the occurrence of any such risks could have an adverse effect on our operations, profitability, andreputation.

◾

Intellectual Property: We own intellectual property that is important to our business and product portfolio. Our intellectual property is
an important factor in protecting our innovation activities and maintaining our competitive advantage. From time to time, our intellectual
property rights may be challenged, including through the assertion of intellectual property infringement claims which could result in us:
being prevented from selling certain products; having to license the infringed product/technology; and/or incurring monetary damages.
The foregoing consequences could have an adverse effect on our sales, profitability, and ability to fully implement our corporate strategy.

◾

Risks of Doing Business in Foreign Markets: Conducting business in markets outside our traditional markets of North America andEurope carries a number of potential risks, including but not limited to, those relating to: political, civil and economic instability anduncertainty; military conflict; corruption risks; high inflation and our ability to recover inflation-related cost increases; trade, customs andtax risks; potential sanctions and export control risk; expropriation risks; currency exchange rates; currency controls; limitations on therepatriation of funds; insufficient infrastructure; competition to attract and retain qualified employees; and other risks associated with
conducting business internationally. Expansion of our business in China is an element of our long-term strategy and, as a result, ourexposure to the risks described above may be greater in the future. The likelihood of such occurrences and their potential effect on us
vary from country to country and are unpredictable, however, the occurrence of any such risks could have an adverse effect on ouroperations, profitability, and financial condition.

◾

Relative Foreign Exchange Rates: Our profitability is affected by movements of our U.S. dollar reporting currency against the Canadiandollar, the euro, the Chinese renminbi, and other currencies in which we generate revenues and incur expenses. Significant long-term
fluctuations in relative currency values, in particular a significant change in the relative values of the U.S. dollar, Canadian dollar, euro, orChinese renminbi, could have an adverse effect on our profitability and financial condition and any sustained change in such relative
currency values could adversely impact our competitiveness in certain geographic regions.

◾

Currency Devaluation in Argentina: Our sales in Argentina are generally paid to us in Argentine pesos. We import certain materials
needed to generate these sales and are contractually obligated to pay in U.S. dollars or other foreign currencies for such materials. The
Argentine peso has experienced significant devaluation recently, including a loss of over 50% of its value relative to the U.S. dollar in
December 2023 alone. Foreign exchange controls imposed by the Government of Argentina have restricted our ability to easily exchange
Argentine pesos for U.S. dollars and other foreign currencies, increasing our exposure to foreign denominated payables. As a result, ourprofitability may be adversely affected by the impact of further devaluation of the Argentine peso relative to foreign currencies.

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Annual Information Form◾

Pension Risks: Some of our current and former employees in Canada, the United States and Germany participate in defined benefit
pension plans. Although such plans in North America have been closed to new participants, existing participants in Canada continue toaccrue benefits. Our defined benefit pension plans in Germany are not funded and plans in Canada and the United States may not be fully
funded. Our pension funding obligations in North America could increase significantly due to a reduction in plan funding status caused bya variety of factors, including: weak performance of capital markets; declining interest rates; failure to achieve sufficient investment
returns; investment risks inherent in the investment portfolios of the plans; and other factors. A significant increase in our pension funding
obligations could have an adverse effect on our profitability and financial condition.

◾

Tax Risks: At any given time, we may face tax exposures arising out of changes in tax or transfer pricing laws, tax reassessments orotherwise. To the extent we cannot implement measures to offset these exposures, they may have an adverse effect on our profitability.
We have incurred losses in some countries which we may not be able to fully or partially offset against income we have earned in thosecountries. In some cases, we may not be able to utilize these losses at all if we cannot generate profits in those countries and/or if wehave ceased conducting business in those countries altogether. Our inability to utilize tax losses could adversely affect our profitability.

◾

Returns on Capital Investments: In recent years, we have invested significant amounts of money in our business through capital
expenditures to support new facilities, expansion of existing facilities, purchases of production equipment and acquisitions. We expect
continued elevated capital expenditures in 2024 to support program awards and our continued growth, including in megatrend areas.
Returns achieved on such investments in the past are not necessarily indicative of the returns we may achieve on future investments andour inability to achieve returns on future investments which equal or exceed returns on past investments could have a material adverse
effect on our level of profitability.

◾

Financial Flexibility: The occurrence of an economic shock not contemplated in our business plan, a rapid deterioration of conditions
or a prolonged recession could result in the depletion of our cash resources, which could have a material adverse effect on our operations
and financial condition.

◾

Credit Ratings Changes: There is no assurance that any credit rating currently assigned to us will remain in effect for any period of timeor that any rating will not be revised or withdrawn entirely by a rating agency in the future. A downgrade in the credit ratings assigned to
us by one or more agencies could increase our cost of borrowing or impact our ability to negotiate loans, which could have an adverse
effect on our profitability, financial condition, and the trading price of our Common Shares.

◾

Stock Price Fluctuation: Trading prices of our Common Shares cannot be predicted and may fluctuate significantly due to a variety offactors, many of which are outside our control.

◾

Dividends: Our Board of Directors (“Board”) may in certain circumstances determine that it is in the best interests of the company toreduce or suspend our dividend. In such event, the trading price of our Common Shares may be materially affected.

Legal, Regulatory and Other Risks◾

Antitrust Proceedings: The automotive industry has in recent years been the subject of increased government enforcement of antitrustand competition laws. Where wrongful conduct is found, the relevant antitrust authority can, depending on the jurisdiction, initiate
administrative or criminal legal proceedings and impose administrative or criminal fines, penalties, or restitution payments. OEMs, cardealers and consumers may also be able to claim against antitrust violators through civil lawsuits. The company’s policy is to comply withall applicable laws, including antitrust and competition laws, and has implemented a robust compliance training program to mitigate
against the risk of an antitrust violation. However, in the event of an antitrust violation, Magna could suffer reputational damage and be
subject to criminal or administrative fines or penalties, restitution settlements, or civil damages that could have a material adverse effecton Magna’s profitability.

◾

Legal and Regulatory Proceedings: From time to time, we may become involved in regulatory proceedings, or become liable for legal,
contractual, and other claims by various parties, including customers, suppliers, former employees, class action plaintiffs and others.
Depending on the nature or duration of any potential proceedings or claims, we may incur substantial costs and expenses, be required
to devote significant management time and resources to the matters and suffer reputational damage as a result of regulatory
proceedings — irrespective of the basis for the claim or the ultimate outcome. On an ongoing basis, we attempt to assess the likelihoodof any adverse judgements or outcomes to these proceedings or claims, although it is difficult to predict final outcomes with any degreeof certainty. Except as disclosed from time to time in our consolidated financial statements and/or our MD&A, we do not believe that anyof the proceedings or claims to which we are currently a party will have a material adverse effect on our profitability; however, we cannot
provide any assurance to this effect.

◾

Changes in Laws: A significant change in the current regulatory environment in our principal markets, including changes in tax laws,
laws related to vehicle emissions, and other laws which impose additional costs on automotive manufacturers or consumers, could havean adverse effect on our profitability. More than 135 jurisdictions have agreed to implement a new global minimum tax regime (“Pillar
Two”) based on model rules published by the Organization for Economic Co-operation and Development. The proposed Pillar Two rules
are intended to ensure that large multinational enterprises pay a minimum tax of 15% on the income arising in each jurisdiction in which
they operate. Although the impact on Magna will depend on how each jurisdiction implements the model rules, as well as profitability andlocal tax liabilities of Magna’s operations in those jurisdictions, we do not believe that the proposed Pillar Two rules will have a material
adverse effect; however, we cannot provide any assurance to this effect.
Magna International Inc.

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Trade Agreements: Historical global growth of the automotive industry has been aided by the free movement of goods, services,people, and capital through bilateral and regional trade agreements, particularly in North America and Europe. Introduction of measures
which impede free trade could have a material adverse effect on our operations and profitability.

◾

Trade Disputes/Tariffs: International trade disputes could, among other things, reduce demand for and production of vehicles, disrupt
global supply chains, distort commodity pricing, impair the ability of automotive suppliers and vehicle manufacturers to make efficient
long-term investment decisions, create volatility in relative foreign exchange rates, and contribute to stock market volatility. The impositionof sanctions, tariffs and/or escalation of trade disputes which interfere with automotive supply chains could have an adverse effect on ouroperations and profitability.

◾

Environmental Compliance: While we regularly attempt to estimate environmental clean-up liabilities, such an exercise is complex. In
addition, environmental laws and regulations are complex, change frequently and have tended to become more stringent and expensive
over time. In certain circumstances, we could be named as a Potentially Responsible Party (“PRP”) with respect to a contaminated site.
Costs associated with being a PRP could be material depending on site conditions and the number of participating PRPs. As a result, we
may incur material costs or liabilities significantly in excess of amounts we have reserved, which could have an adverse effect on ouroperations, profitability, financial condition, or reputation.

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Annual Information Form

6. Description of the BusinessGe ograp h ic M a r kets & C u s to m e r s
Major Customers
While we supply products and services to a large number of customers worldwide, sales to our six largest customers represented thefollowing proportions of our consolidated sales in 2023 and 2022:
Magna
Sales
RankingOEM
Ranking(1)16Proportion of
Magna Sales
Customer

2023

2022

General Motors

15%

16%

2

13

Mercedes-Benz

14%

13%

3

12

BMW

12%

14%

4

7

Ford

12%

13%

5

5

Stellantis

12%

13%

6

2

Volkswagen

11%

10%

Other

24%

21%

TOTAL

100%

100%

Note:
(1) Based on 2023 global light vehicle production.

Customer Management Offices
We have a globally structured sales, engineering and marketing team spread across multiple global locations where our customers maintainengineering, commercial and/or manufacturing facilities. The various internal operating divisions and subsidiaries of the automobile
manufacturers normally initiate many of their own purchasing decisions. As a result, an automobile manufacturer may effectively constitutemultiple customers.

Purchase Orders
Our sales are generated through customer requests to quote on particular products, as well as the tools and dies required to produce parts.
Purchase orders for our products are typically for one or more models, and typically extend over the life of each model, which is generally
four to seven years. However, purchase orders issued by our automobile manufacturer customers typically do not require them to purchase
any minimum number of our products. Releases under such purchase orders, which authorize us to supply specific quantities of products,
are issued for planning, raw material, and production purposes, which is typically over a one to four month period in advance of anticipateddelivery dates. The actual number of products that we supply under purchase orders in any given year is dependent upon the number ofvehicles produced by the automobile manufacturers of the specific models in which those products are incorporated.
It has been our experience that once we receive purchase orders for products for a particular vehicle model or program, we will usuallycontinue to supply those products until the end of that model or program, although most of our customers’ purchase orders allow them toterminate the purchase order for convenience. In addition, as part of our purchase contracts, we are generally required to supply service
parts for up to 15 years after the end of production of any model, provided that we are the contracted supplier at the time production
ceases. Automobile manufacturers could cease sourcing their production requirements from us for a number of reasons, including if werefuse to accept demands for price reductions or other concessions and if the vehicle is not meeting their sales targets. Should the latteroccur, we are still required to provide service parts for up to 15 years, although we may be able to negotiate that this be supplied as a
one-time up front purchase.

Ma n u fa ctur i n g & E n g i n eer i n g
Operational Excellence
As part of our strategy of maintaining operational excellence, our global operating units strive to achieve “best in class” performance in allareas of manufacturing. In order to drive continuous improvement, we monitor our progress by using an assessment process known as the
Magna Factory Concept or “MAFACT”, which includes elements we view as critical to achieving operational excellence in accordance with
our Operational Principles. Best practices, “lessons learned” and key initiatives are shared among our global operating units.

Magna International Inc.

27

Factory of the Future (FoF) Initiatives
We continue to look at ways to integrate leading edge manufacturing trends into our operations, including data analytics, as well as artificial
intelligence (AI) capabilities designed to, among other things: increase information available to human operators to enhance decision making;automate certain processes to increase efficiency and safety; optimize material and process flows; and perform predictive maintenance onequipment. Specifically, a number of our global facilities have implemented a combination of new technological applications, software, andprocesses in order to benefit from more efficient and effective factory solutions, which is known as our “Factory of the Future (FoF)”
approach. In 2023, we launched 83 FoF projects from our Corporate R&D team globally. A few examples of our FoF activities are set out
below.

Advanced Robots & DigitalTwin• Our Corporate R&D team has developed a core
Advanced Robotics System for high volume
production using state-of-the-art 2D/3D visionsystems and advanced robotics trajectory
planning with AI supporting simplified, rapid
implementation• The system has been launched in more than ten
Magna facilities with over 40 systems in highvolume production. As part of our planned “scaled
implementation” approach, the system continues
to scale in other facilities across all Magna
Operating Groups for cost optimization• The advanced robotics platform allows continuous
upgrades in performance and continues tointroduce lower cost hardware enabled bysoftware functionality

Predictive Maintenance• Our Exteriors facilities have actively implemented
predictive maintenance of injection moulding
machines. Data from a machine controller, as wellas additional sensors, is collected and processedin real time.
• The data is then made available by way of adashboard and automatic alerts allowing emerging
maintenance issues to be pinpointed andaddressed before they develop into larger issues.
• These activities allow for production and efficiency
improvements, including reduced equipment
downtime, as well as avoidance of unexpected
equipment failures.
• This flexible hardware and software platform isbeing expanded to include additional equipment
and processes throughout Magna, including
additional use cases in metal forming.

Fenceless Robot System• Our Corporate R&D team is working with several
robotics companies, startups, research labs anduniversities to develop enabling technologies thatcan be scaled across Magna. Together with one of
our Powertrain Divisions, we co-developed andimplemented the first fenceless robot system forhigh volume production at Magna.
• The fenceless robot system can handle almost
double the payload at 10 times the speed of othercollaborative robotic systems in the market forboxes, baskets, and trays.
• Elimination of fencing and guarding of robot cells
takes up less floor space and allows freedom of
movement and access for human workers• The insight gained from the fenceless robot system
is allowing Magna to co-develop, test, and validate
the next generation of fenceless robotics for highvolume automotive production in a safe,
collaborative, and efficient way.

Vision Inspection and Augmented
Reality• Our Corporate R&D team, working with vendor
partners, is implementing multiple use cases of
AI-enabled vision systems using low cost cameras
to identify defects, track quality and process
conditions to allow real-time process monitoring
and feedback.
• Magna works with multiple vendors, but also
develops in house capabilities to support future
scaling of use cases and improving technology.

Data Analytics & Digital
Infrastructure• Our Corporate IT team, Operating Groups,
Divisions, and Corporate R&D teams are
implementing standards and data connectivity
across the enterprise• Standardized digital infrastructure enables faster,
more intelligent analytics solutions, ultimately
aiding decision making• Standardized digital infrastructure also enables
lower cost, faster implementation of shop floor
solutions responsive to Industry 4.0 – which
defines the rapid change to technology, industries,and society due to increasing interconnectivity
and smart automation

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Annual Information Form

Facilities
As at December 31, 2023, we had the following manufacturing and PDE&S facilities in each designated geographic region:
12
(4%)

4
(4%)

88
(26%)

26
(25)%

25
(24%)

Manufacturing
Facilities

138
(40%)

PDE&S

104
(30%)

North America
Asia

49
(47%)

EuropeRest of World

North America
Asia

EuropeRest of WorldOur manufacturing and PDE&S facilities occupied approximately 79.9 million and 3.9 million square feet, respectively. These facilities
were broken down between third party leases, and those owned by us as set out below. At this time, the largest percentage ofproperties leased (by square footage) from any single landlord is approximately 15%.
0.4m

(10%)

Manufacturing
Facilities
46.0m
(58%)

33.9m
(42%)

PDE&S
Facilities
3.9m (sq ft)

79.9m (sq ft)

3.5m
(90%)

Owned

Leased from 3rd Parties

Our facility leases typically have terms of at least five years with one or more options to renew. Among other terms, our leases typicallyrequire us to return the facilities to the condition in which we received them at start of the lease (reasonable wear and tear excepted). From
time to time, the cost of doing so may be significant due to such factors as the length of the lease period, the nature of the manufacturing
operations, the extent of modifications made to the leased properties over the term of the lease and other factors.
We are also subject to environmental laws and regulations both as tenant and owner of our properties. Our leases with third party landlords
generally provide that we must maintain the leased properties in accordance with all applicable laws, including environmental laws. Magnaroutinely conducts Phase 1 Environmental Assessments, and if necessary Phase 2 Site Investigations, at manufacturing, assembly, andwarehousing locations prior to or at the start of occupancy to identify any actual and potential pre-existing environmental concerns at leasedor owned sites. Magna is responsible for addressing certain environmental impacts arising at our properties, including exacerbations ofexisting impacts as defined by lease terms or regulatory requirements. Our leases with third party landlords generally also contain indemnities
in favour of the landlord with respect to environmental matters and those indemnities may survive the termination of the leases.

Key Components and Raw Materials
Our key purchased components include: stampings, electronics, semiconductor chips, molded parts, die casting, forging, coverstock, andwire harnesses. Our key purchased raw materials are steel, resin and aluminum. While we endeavour to purchase the majority of thesecomponents and raw materials from regional suppliers where we do business, factors such as price, quality, transportation costs,
warehousing costs, duties, tariffs, availability of supply, timeliness of delivery, and customer requirements have an impact on the decision tosource from certain suppliers. In some cases, we are directed by our OEM customers to source components or commodities from specific
Magna International Inc.

29

suppliers, as is largely the case for leather we purchase for use in automotive seats we produce. We also purchase some key components
and raw materials offshore when shortages occur or when we choose to source one supplier for a global program. Prices for our raw
materials used in our production of parts, like steel, resin, and aluminum, continue to be volatile.
Approximately two-thirds of our combined steel and aluminum is acquired through resale programs operated by automobile manufacturers
and the balance is generally acquired through annual or six month contracts that fluctuate with market indices. Under customer steel resale
programs we are not exposed to steel and aluminum price volatility, thus helping to manage our production costs. Certain of our operations
generate steel and aluminum scrap, which we typically sell at prices that fluctuate with published market indices. Most of our resin purchases
fluctuate directly with market indices, although we do participate in some customer resale programs on approximately one quarter of ourresin purchases. In some cases, our customers direct us to buy certain other raw materials from specified suppliers, at specified prices.
Consistent with lean manufacturing principles, we do not typically carry inventories of key raw materials or finished products significantly inexcess of those reasonably required to meet production and shipping schedules. A global shortage of semiconductor chips for us inautomotive applications has had a material adverse effect on global automotive production volumes since 2020 and may continue havingsome impact in 2024. Although supplies of semiconductor chips are significantly better than in the last two years, it remains unclear when
supply and demand for automotive semiconductor chips will fully rebalance. Semiconductor supply remains sensitive to interruption fromother impacts such as natural disasters, inventory levels, production capacity and lead-times that are not yet back to pre-2020 levels. The
risks related to semiconductor supply and potential future shortages/supply constraints of key commodities are discussed in greater detailunder “Section 4 – Our Business & Strategy – Macroeconomic, Political and Other Trends” and “Section 5 – Risk Factors”.

P rodu cts & S er vi ces
Top Programs
Our top fifteen programs/platforms based on 2023 production and vehicle assembly sales were:
Capabilities

Jeep Grand Cherokee

◾

◾

◾

◾

◾

GeneralMotors

GMC Acadia, Buick Enclave,
Cadillac XT6, Chevrolet Blazer,
Chevrolet Traverse

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

Ford

Ford Transit, Ford Transit Custom◾

◾

MercedesBenz

Mercedes-Benz GLE/GLE Coupe,
Mercedes-Benz GLS

◾

◾

◾

◾

◾

◾

BMW

BMW X5

◾

◾

◾

◾

◾

◾

◾

Stellantis

RAM Pick-up Trucks

◾

◾

◾

◾

◾

◾

BMW

BMW X3◾

◾

BMW

BMW 5 Series

◾

Ford

Ford Escape, Ford Kuga, Lincoln
Corsair◾

Ford

Ford Expedition, Lincoln Navigator

Stellantis

Chrysler Pacifica

BMW
Ford

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

◾

BMW X1◾

◾

◾

◾

Ford F-Series Super Duty

◾

◾

◾

Vehicle Engineering &Manufacturing

Stellantis◾

Mechatronics◾

Lighting

Powertrain◾

Mirrors

Exteriors◾

GeneralMotors
MercedesBenz

VehicleElectronics

Body & Chassis

Full-Size SUVs &Pick-up Trucks
Mercedes-Benz
G-Class

Customer

Seating Complete
Systems Vehicles

Power & Vision

Seating

Body
Exteriors &Structures

◾

◾

◾

◾
◾

◾

Note: Capabilities represented may not be on each vehicle or each trim level of each vehicle. Additionally, our capabilities in each product area range from components to fullsystems, only some of which may be represented on any particular program. Our Roof Systems capabilities are not present on the programs/platforms listed.

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Annual Information Form

Product Portfolio
We continue to evolve our product portfolio consistent with the strategy described under Section 4 “Our Business & Strategy – Corporate
Strategy” in this AIF. The development of innovative technologies and solutions which are responsive to the global megatrends defining the“Car of the Future” requires research and development (“R&D”) spending, as well as capital investments and the acquisition of engineering
talent with the necessary software and other expertise. We believe that in typical years, the relatively stable profitability and cash generationfrom our “traditional” businesses provide us with the ability to fund the R&D and capital investment required to realize opportunities related
to product areas such as electrification, ADAS and others aligned with the Car of the Future.
Some of our recent innovations can be found in “Section 7 – Innovation and Research & Development – Innovations and Innovation Awards”.

Product Segments
A description of our product and service capabilities, processes, top customers, and key competitors by reporting segment follow.
Manufacturing facility and PDE&S Centres counts below include joint venture facilities.

Body Exteriors & Structures
Our Body Exteriors & Structures segment includes our body and chassis systems, and exterior systems operations.

156*

Manufacturing Facilities
*

24

*

PDE&S Centres

20 69,450 $17.5B
Countries

Employees2023 Sales

Figure includes certain manufacturing facilities and PDE&S centres shared with other reporting segments.

Top Segment Programs
Customer

Vehicle1. General Motors

Full-Size SUVs & Pick-up Trucks

2. Stellantis

Jeep Grand Cherokee

3. General Motors

GMC Acadia, Buick Enclave, Chevrolet
Traverse & Blazer, Cadillac XT6

4. Mercedes-Benz

Mercedes-Benz GLE/GLE Coupe, GLS

5. FordFord F-Series Super Duty

Segment Trends and Strategic Focus
Within our Body Exteriors & Structures segment, we aim to support our customers’ efforts to deliver vehicles which consume less fuel andproduce lower CO2 emissions, particularly through reduced vehicle weight, aerodynamic enhancements, and use of multi-materials. We
currently offer our customers a broad range of lightweight product solutions, such as thermoplastic liftgates, as well as reduced-weight
products formed through advanced manufacturing processes, such as hot stamping, high-pressure aluminum casting and multi-material
joinery.

Magna International Inc.

31

Product Capabilities

Body and Chassis
Products◾

body systems
chassis systems◾ battery enclosures◾ engineering and testing◾

Key Processes
Forming technologies:hydroforming◾ cold stamping, including
high-strength steel &aluminum◾ hot stamping◾ roll forming◾ high pressure aluminum
casting◾ advanced welding & joining◾ sealing and adhesive
bonding◾ stretch bending of aluminum
extrusions◾

Finishing technologies:◾ e-coating◾ high temperature wax
coating◾ heat treatment◾ machining◾ powder coating◾ conversion coating foraluminum castings

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Annual Information Form

Top Customers

Key Competitors

◾

◾

◾

◾

BMW
Ford
◾ General Motors◾ Mercedes-Benz◾ Stellantis◾ Volkswagen

Benteler International AG
Flex-N-Gate Corporation◾ F-Tech Inc.
◾ Georg Fischer Ltd.
◾ Gestamp Automoción S.L.
◾ Martinrea International Inc.
◾ Metalsa, S.A. de C.V.
◾ Minth Group Ltd.
◾ Nemak, S.A.B. de C.V.
◾ Tower International, Inc.

Exteriors◾

fascia & trim
front end modules◾ integration panels◾ liftgate modules◾ active aerodynamics◾ engineered glass◾ running boards◾ truck bed access products◾ breakthrough lighting◾ side doors◾ greenhouse products◾

Top Customers

Key Processes

Products

Molding technologies:
injection molding, such as
two shot, structural, insert,
injection compression forthermoplastics & reaction
injection molding◾ extrusion processes, such as
co-extrusion, thermoset andthermoplastic extrusion◾ compression-molding forthermosets◾ expanded polypropylene
foam◾ metal rollforming◾ glass encapsulation◾ tooling◾

Key Competitors

◾

◾

◾

◾

BMW
Ford
◾ General Motors◾ Renault-Nissan-Mitsubishi◾ Stellantis◾ Volkswagen

ABC Group
Flex-N-Gate Corporation◾ Plastic Omnium S.A.
◾ Röchling Group◾ Samvardhana Motherson
Peguform◾ SRG Global Inc.

Finishing processes:◾ painting◾ hardcoating◾ chrome plating◾ hot stamp foils◾ metal finishing◾ hydrographics◾ laser etching/engraving◾ in-mold film
Assembly processes:◾ adhesive bonding◾ infrared, ultrasonic, vibration,
torsional and resistance
implant welding◾ laser cutting and welding◾ manual and automatedassembly & sequencing

Magna International Inc.

33

Power & Vision
Our Power and Vision segment comprises our global powertrain systems, electronics systems, and mechatronics, mirrors & lighting, androof systems operations.

109*

Manufacturing Facilities
*

62

*

PDE&S Centres

24 58,625 $14.3B
Countries

Employees2023 Sales

Figure includes certain manufacturing facilities and PDE&S centres shared with other reporting segments.

Top Segment Programs
Customer

Vehicle1. General Motors

Full-Size SUVs & Pick-up Trucks

2. BMW

BMW X1

3. Chery

Chery Tiggo 8

4. Stellantis

Ram Pick-up Trucks

5. BMW

Mini Cooper

Segment Trends and Strategic Focus
In our Power and Vision segment, we seek to realize opportunities presented by trends toward electrification, advanced driver assistancesystems and autonomous driving. We believe that our powertrain business is well-positioned to benefit from the shift toward electrificationby leveraging the investments we have made in high-voltage technologies, including highly integrated primary and secondary electric drive
systems, as well as individual components such as electric traction motors and inverters through our joint venture with LG Electronics Inc.
While investing in electrified technologies we continue to optimize operations in our market-leading traditional products such as 4WD/AWD
systems and transmissions. Our Vision Systems business is currently a leading supplier of camera-based driver assistance systems, and wecontinue to invest in advanced driver assistance technologies to expand the assisted driving systems expertise we can offer customers. We
continue to leverage our expertise in supplying and integrating the sensor suite to create seamless functionality of features, software, andmiddleware. Vehicle connectivity is also a crucial aspect of our business, and we develop advanced systems that enable seamless
communication between vehicles, infrastructure, and other devices. These investments include both in-house research and development,
as well as venture capital investments in and strategic relationships with mobility and technology companies.

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Annual Information Form

Product Capabilities

Powertrain
Products◾

high-voltage electric drive
systems and components(eMotors*; inverters*,
onboard chargers*,
gearboxes, e-clutches forhybrid and BEVs◾

transmission systems(dedicated hybrid drives, dual
clutch/hybrid dual clutch andmanual transmissions)◾ driveline systems (AWD/4WD
products, including transfer
cases and rear drive
modules)◾ metal-forming products(transmission, ICE, anddriveline components)* Through our joint venturewith LG Electronics Inc.

Key Processes◾

powertrain systems
assembly and final testing◾ flow-forming,◾ stamping and spinning◾ grob, roller & cam die spline
forming◾ precision heavy stamping◾ profilator processing◾ in-die fine cutting◾ soft and hard processing ofgears and shafts◾ CNC machining & broaching◾ rotary swaging◾ heat treating◾ welding, including laser,
electron beam (EB),capacitor discharge (CD),inertia, resistance & metal
inert gas (MIG)/tungsten inert
gas (TIG)◾ assembly & final test ofeMotors*, inverters*, andon-board chargers*

Top Customers

Key Competitors

◾

◾

◾

◾

BMW
Ford
◾ General Motors◾ Mercedes-Benz◾ Renault-Nissan-Mitsubishi◾ Stellantis◾ Volkswagen

Aisin Group
BorgWarner Inc.
◾ Dana Inc.
◾ EnPower Electronics◾ GKN plc
◾ JATCO Ltd.
◾ Linamar Corporation◾ Nidec Corporation◾ Robert Bosch GmbH
◾ Schaeffler AG◾ Valeo S.A.
◾ ZF Group* Through our joint venturewith LG Electronics Inc.

Magna International Inc.

35

Electronics
Products◾

far camera modules (monoand stereo cameras)◾ remote camera heads◾ interior sensing cameras◾ radars◾ thermal sensing◾ domain controllers

Key Processes◾

printed circuit board
assembly◾ high volume flash
programming◾ automated image & machine
vision camera assembly
capability◾ in-circuit and functional
testing◾ complete ADAS engineering
services; systems, electricaldesign, software design,
cybersecurity, functionalsafety, mechanical mesignand validation

Top Customers

Key Competitors

◾

◾

◾

◾

General Motors
Mercedes-Benz◾ Stellantis◾ Subaru◾ Volkswagen◾ Volvo

Aptiv PLC
Continental AG◾ Denso Corporation◾ Forvia Group◾ Robert Bosch GmbH
◾ Valeo S.A.
◾ ZF Group

Mirrors
Products

Key Processes

Key Competitors

Top Customers

◾

◾

◾

◾

◾

◾

◾

◾

interior mirrors
exterior mirrors◾ camera monitoring systems
driver/occupantmonitoring systems◾ smart actuators

electronics integration
injection molding◾ painting◾ manual and automatedassembly

BMW
Ford◾ General Motors◾ Mercedes-Benz◾ Stellantis◾ Volkswagen

Ficosa International S.A.
Gentex Corporation◾ SMR Automotive

Lighting
Products

Top Customers

Key Processes

◾

◾

◾

◾

◾

◾

forward lighting
rear lighting◾ lit grilles/panels/displays

electronics integration
injection molding◾ hardcoating/anti-fog
treatment◾ metallizing◾ manual and automatedassembly

General Motors
Stellantis◾ Volkswagen◾ Volvo

Key Competitors◾

Changzhou Xingyu
Automotive Lighting System
Co, Ltd.
◾ Hella KGaA Hueck & Co.
(now part of Forvia Group)◾ Koito Manufacturing Co.
◾ Marelli Automotive Lighting◾ Valeo S.A.

Mechatronics
Products◾

latching systems◾ door modules◾ charge port doors◾ power systems◾ hinges◾ door handles

Key Processes◾

light stamping◾ injection molding◾ manual and automatedassembly

Top Customers◾

BMW◾ Ford◾ General Motors◾ Renault-Nissan-Mitsubishi◾ Stellantis

Key Competitors◾

ADAC Automotive◾ Aisin Corporation◾ Brose Fahrzeugteile GmbH& Co. KG
◾ Inteva Products, LLC◾ Kiekert AG

Roof Systems
Products◾

modular roofs
hard tops and soft tops
◾ textile folding roofs◾

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Annual Information Form

Key Processes◾

“cut and sew” of complete
fabric covers◾ backlight gluing◾ manual and automatedcomplete retractable roof
assembly

Top Customers

Key Competitors

◾

◾

◾

◾

BMW
Mercedes-Benz◾ Renault-Nissan-Mitsubishi◾ Stellantis◾ Toyota

Valmet Automotive Inc.
Webasto GroupSeating Systems
Our Seating Systems segment comprises our global seating systems operations.

70*

9*

Manufacturing Facilities

PDE&S Centres*

16 33,525 $6.0 B
Countries

Employees2023 Sales

Figure includes certain manufacturing facilities and PDE&S centres shared with other reporting segments.

Top Segment Programs
Customer

Vehicle1. Stellantis

Jeep Grand Cherokee

2. BMW

BMW X5

3. FordFord Expedition, Lincoln Navigator

4. FordFord Escape, Lincoln Corsair

5. FordFord Transit

Segment Trends and Strategic Focus
Our Seating Systems group continues to grow by winning new business based on its reputation for delivering innovative seating solutions.
Longer term, our Seating Systems group aims to capitalize on its strength in seat mechanisms, vertical integration, and reconfigurable
seating, specifically to supply reconfigurable seating solutions for applications such as car sharing and autonomous ride sharing; as well asseat products that are responsive to growing EV requirements, including lighter weight seats, lower seat box height, and sustainable seating
solutions.
Product Capabilities

Seating Systems
Products◾

complete seating systems◾ seat structures,
mechanism & hardware
solutions◾ foam & trim products,
including sustainable seating
solutions

Key Processes◾

traditional “cut and sew”
technology◾ manual and automatedassembly

Top Customers◾

BMW◾ Chang’an◾ Automobile◾ Ford◾ Geely◾ General Motors◾ Stellantis◾ Volkswagen

Key Competitors◾

Adient plc◾ Forvia Group◾ Lear Corporation

Magna International Inc.

37

Complete Vehicles
Our Complete Vehicles segment comprises our global complete vehicle engineering and manufacturing operations.

10*
Manufacturing Facilities*

27* 11 14,000 $5.5 B
PDE&S Centres

Countries

Employees2023 Sales

Figure includes certain manufacturing facilities and PDE&S centres shared with other reporting segments.

Segment Programs
Customer

Vehicle1. Mercedes-Benz

Mercedes-Benz G-Class

2. BMW

BMW 5 Series

3. Tata Motors

Jaguar I-Pace

5. Tata Motors

Jaguar E-Pace

6. BMW

BMW Z4

Segment Trends and Strategic Focus
Our Complete Vehicles business continues to provide OEM-level expertise to traditional customers seeking a trusted vehicle complete
vehicle outsource partner, as well as new market entrants seeking expertise for their traditional, electrified, autonomous and/or new mobility /MaaS concepts. Traditional OEMs currently represent the substantial majority of our Complete Vehicles group business customers. However,engineering sales with non-traditional customers, including Asian OEMs and new OEM entrants, continue to grow. MaaS providers represent
an important source of new opportunities since they typically do not have the vehicle development, engineering, integration, and assembly
capabilities of traditional OEMs and thus require outsource partners to commercialize their concepts. In this segment, we also focus onleveraging our expertise in alternative energy storage and propulsion systems by further strengthening and capitalizing on our know-how in
different propulsion systems. In addition, we continue to focus on integration and testing of autonomous driving systems, and we support
our customers with one of the most versatile test environments for highly automated vehicles.
Product Capabilities

Vehicle Engineering & Manufacturing
Products◾

complete vehicle
manufacturing◾ engineering services

Key Processes◾

body-in-white◾ paint◾ assembly

Top Customers◾

BMW◾ Fisker◾ Mercedes-Benz◾ Tata Motors

Key Competitors
Traditional and New OEMs
Contract Manufacturers
NEVS AB◾ Valmet Automotive◾ VDL Nedcar B.V.
◾

Engineering Services◾ Bertrandt Group◾ EDAG Engineering GmbH
◾ IAV GmbH

Tooling & Engineering
As part of our production programs, we design, engineer and manufacture tooling for our own use, as well as for sale to our customers.
Tooling used in our production programs is often purchased by us from third parties and sold to our customers on a pass-through basis. In
addition, we manufacture tooling for our customers on a standalone basis, which is tooling sold separately and not part of a production
arrangement. We also provide engineering services independent of our production programs, as well as for programs for which we haveproduction sales.

Acquisitions and Divestitures
For further details of our acquisitions and divestitures in the last three fiscal years, refer to “Schedule B – Acquisitions and Divestitures”.

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Annual Information Form

7 . I n n ova t i o n a n d R e s e a r c h & D e ve l o p m e n t
Fo cus on I n n ova ti on a n d Tec h n o l o g y
We have historically emphasized technology development and product and process innovation as a key element of our corporate strategy.
See “Section 4 – Our Business & Strategy – Our Corporate Strategy” for further details. We continue to invest significant resources todevelop and commercialize innovative technologies, which will provide additional value to our customers. In addition, we aim to advance oursustainability goals through innovations in electrification, driver assistance, lightweighting, adjacent mobility markets such as micromobility,
materials, fuel efficiency, and energy efficiency for both end-use products and our manufacturing processes.
We expect that our involvement with automobile manufacturers and new mobility partners in the development of innovative product andprocess technologies will increase as such manufacturers and partners further involve suppliers like us in the overall vehicle concept,
development, and manufacturing process.

Ou r Researc h a n d Devel op m e n t Pr o c e s s
Our R&D activities take place at our Division/Operating Group level and at the corporate level. Our Divisional/Operating Groups work withour customers to identify product and technology gaps. Magna’s Corporate R&D team, under the global direction of our Senior Vice
President, Corporate R&D, analyzes the key megatrends that are expected to drive future mobility and automotive development. As part ofthese efforts, our Corporate R&D team engages with the advanced engineering and product development teams of our current andpotential OEM customers to understand their product strategies and better align our own product strategy and technology developmentwith customer needs.
All of our R&D projects follow an Innovation Development Process (IDP) process – a multi-stage process aimed at turning ideas into
innovations that can ultimately be commercialized and scaled. The initial phase of the process is designed to foster the generation of ideas
and includes, among other things: identification, understanding of and analysis of societal, digital, demographic, regulatory, industry andother trends which may create demand for and thus drive development of new automotive and mobility technologies; review of academic
research; collecting and screening ideas submitted through innovation programs; review of emerging technologies in non-automotive
industries; and automotive customer input.
Concepts that progress past this initial stage are further evaluated, including with respect to: fit with our strategy regarding electrification,
autonomy, new mobility, vehicle connectivity and advanced manufacturing; commercialization potential; and risks and challenges to further
development. Selected innovations then progress through subsequent stages towards product or process realization, validation andeventually, product launch.
Our R&D initiatives are supported by and involve close collaboration with our Corporate R&D group. Our Division/Operating Group R&D
teams work together with our Corporate R&D group on technology development, and where necessary specific working groups are
established to discuss and develop technological solutions.
As a result of our innovation activities, we have developed a number of product, process and materials innovations, some of which aredescribed in this Section 7 under “Innovations and Innovation Awards”.
As a key part of our own innovation efforts and to gain further access to innovative thinking outside of our company, we partner withstart-ups and early stage companies, inventors, entrepreneurs, universities, technical institutions, and the venture capital community to help
bring innovative ideas to market. We also look for the best ideas from other industries and apply them to mobility – a process we call
“auto-qualifying”. As part of our continuing efforts to develop innovative solutions to the technology challenges of new mobility and theautomotive industry, in the last year we have considered thousands of potential innovations, which has led to several active projects. Suchprojects include: development of Driver Monitoring Systems and ADAS features; efficiency and performance technologies related to electric
drives and power electronics; and advanced robotics, inspection systems, Digital Twin/simulation and data analytics technologies supporting
our strategic focus on operational excellence.
As an example of our collaborative product innovation process in action – in 2023, we joined NorthStar – Telia Sweden and Ericsson’s 5G
innovation program for industrial enterprises. As part of the agreement, Telia and Ericsson have built a dedicated, private 5G network at
Magna’s test track located in Vårgårda, Sweden, where new cutting-edge ADAS solutions in vehicle-to-vehicle (V2V) and vehicle-toeverything (V2X) connectivity are being trialed. As part of NorthStar, Magna will have access to 5G millimeter wave (mmWave) technology,
enabling low latency gigabit speeds and seamless connectivity for new ADAS trials. Additionally, the use of mmWave technology enables
ongoing research into joint sensing and communication systems. Leveraging the 26GHz frequency band and 400MHz bandwidth, thisnetwork is crucial for Magna’s driving automation and driver support systems, which rely on real-time data from vehicle sensors. Fast
network speeds and quick response times are essential for timely alerts to drivers, preventing accidents, and minimizing their impact.

Magna International Inc.

39

Int ellectua l P r op er ty
We own and use numerous patents, trademarks, and other intellectual property in connection with our operations. In addition, certain of our
Operating Groups license their technology to third parties on a limited basis. We also license and use, to a minor extent, patents owned byothers. From time to time, claims of intellectual property infringement are made by us or against us. At present, we believe that the outcomeof any pending claim, whether positive or negative, will not have a material adverse effect upon us. While in the aggregate our intellectual
property and licenses are considered important in the operation of our business, we do not consider them of such importance that the
expiry of any one patent or license would materially affect our business. See “Section 5 – Risk Factors – “Intellectual Property” in this AIF fora discussion of risks related to our intellectual property.

Inn ovation s & In n ova ti on Awar d s
We believe that innovation has been the foundation of Magna’s success and an important factor in our competitiveness, a key
operational priority, and a critical element of our corporate strategy. Our current strategic focus is aimed at responding to key industry
trends, as discussed in “Section 4 – Our Business & Strategy – Our Corporate Strategy”. Some examples of recent innovations are as
follows:

Innovations
NEXT GENERATION 800V EDRIVE
Magna’s next generation 800v eDrive solution is a drop-in solution that incorporates several advanced technologies,
resulting in significant reductions in weight and size, enhanced performance, extended driving range and greater
sustainability. The innovation offers enhanced flexibility due to its lightweight (75 kg) design and 20% reduction inheight from Magna’s prior generation eDrive. A key technology and a supplier industry-first advancement is the ability torotate the eDrive 90 degrees around the drive axis, which allows improved system integration in the front and rear vehicle
space. Delivering peak power of 250 kW and a peak axle torque of 5,000 Nm, the system also achieves up to 93%
efficiency in real-world driving (including Worldwide harmonized Light vehicles Test Cycles (WLTC) and highway driving),
which significantly improves efficiency across a wide range of vehicle speeds. The eDrive system requires less aluminumand heavy rare earth materials, resulting in a significant reduction of CO₂ emissions during production by approximately
20% compared to previous generation eDrives.

ETELLIGENT TERRAIN WITH EBEAM™
The EtelligentTerrain is a battery electric 4WD powertrain system designed to maintain full on- and off-road capabilities
with no compromise of payload and towing capabilities. The system is powered by Magna’s steerable eBeam™ Mid at
the front and an eBeam™ High at the rear, with a combined output of 426 kW of peak power. The eBeam™ drops into
the place of traditional beam axles, reusing existing suspension and brake systems, and avoiding the need for expensive
restructuring of existing truck platforms These benefits help automakers simplify the transition toward electrificationof these vehicle segments. Seamless decoupling capability of the front axle means more efficient operation. Magna’s
sophisticated Energy and Motion Control software controls the two eBeams™ which provides off-road specific drive
modes (selectable crawl, auto hill ascent/descent) and torque distribution capabilities (high range, e-selectable low range).
The scalable design is applicable to passenger sport utility, pickup trucks, and light commercial vehicles.

BATTERY ENCLOSURES
Magna has been awarded nine global customer programs for its battery enclosures, including the all‐electric Ford
F‐150 Lightning, GMC Hummer EV, and Chevrolet Silverado EV. The product illustrates our ability to expand structural
product opportunities as electrification grows. The enclosures, which all EVs require, house high‐voltage batteries,
electrical components, sensors, and connectors, contributing to the structural and safety aspects of a vehicle’s frameand protecting critical components from potential impact, heat, and water intrusion. These complex assemblies areavailable in steel, aluminum, and multi-material configurations including lightweight composites.

MODULAR eDECOUPLING UNIT
Magna has started production of a first-to-market, modular eDecoupling unit to support multiple battery electric vehicle
programs for a German premium OEM. A bolt-on, stand-alone solution for BEVs, Magna’s electro-magnetic eDecoupling
is a robust product technology that is integrated as a complete module. The eDecoupling is an electromechanicaldevice that disconnects the e-motor from the driveshaft in EVs when propulsion power is not needed, reducing
energy consumption, and increasing efficiency. It contributes to increased electric driving range of up to nine percent, asignificant benefit for all EVs. This is achieved by reducing drag torque losses of the e-motor and gearbox while its
eDecoupling controls software smoothly operates all shifting sequences. The unit which has an activation time of lessthan 100 milliseconds, features a compact design to minimize added package space and weight in both axial andradial direction.

40

Annual Information FormECOSPHERE™ SEATING & INDUSTRY-FIRST, 100% MELT RECYCLABLE FOAM AND TRIM SEATING SOLUTIONSThe EcoSphere™ product family, which is expected to be available for production in 2025, is an industry-first solution
comprised of sustainable trim materials, trim padding, structures, and foam. Traditional soft materials in automotive seats
are challenging to separate efficiently at the end of their lifecycle for recycling purposes due to their composition ofvarious polymers and materials, such as polyurethane, nylon, vinyl, and adhesive. By utilizing mono-material polyethylene
terephthalate (PET), a type of clear, strong, lightweight and 100% recyclable plastic commonly used to make waterbottles, along with the company’s innovative 100% Melt Recyclable Foam and Trim system, EcoSphere eliminates theneed to take the trim and foam apart to recycle because they are made from a single material. This innovation leverages
Magna's expertise in the integration of foam chemistry, trim manufacturing, craftsmanship and tooling to develop aseamless and affordable solution.
Our 100% Melt Recyclable Foam and Trim has similar properties to polyurethane, but it can be melted and used
repeatedly to make more automotive seat components or other consumable goods such as clothing, while having half
the carbon footprint of polyurethane. The technology has been named a 2023 Automotive News PACEpilot finalist, anaward that recognizes pre-commercial innovation in the automotive or future mobility space.

SMARTACCESS™ POWER DOOR SYSTEM
Magna’s SmartAccess™ complete power door system, which is in production on the opposing rear doors of the
Ferrari Purosangue, includes our power door drive unit, SmartLatchTM with cinch actuator, and a first-to-market
Haptronik™ motion control. Haptronik is an innovative motion control software that enhances the tactile feel of door
movement, enabling effortless opening and closing. It can detect when the vehicle is parked on a curb or a hill andautomatically adapts the gravitational force so that opening and closing remains smooth in these conditions. It also
includes anti-slam and wind catch features. SmartAccess™ was a finalist for the 2022 Automotive News Pace Awards,
and the system can be configured for a wide range of vehicle embodiments – to serve the rapidly growing cargo andrideshare markets as well.

CLEARVIEW™ VISION SYSTEM
Magna’s ClearViewTM vision innovation is a unique system that combines camera and mirror technology, potentiallyreducing blind-spots and enhancing visibility around the vehicle. The complete vision system with first-to-market
features, has been introduced on Ram 2500 and 3500 Heavy Duty trucks. The ClearView™ system includes an interior
rear-view video mirror, exterior mirrors with integrated cameras and a center high-mounted stop lamp camera. An
additional trailer camera is available as an option to provide an unobstructed view while towing. All camera data isprocessed through Magna’s software in a central electronic control unit. The interior mirror includes Magna’s PACE
award-winning Infinity™ glass. Drivers can switch between an optical rear-view and a video display that shows up to
three camera views at the same time – the first of its kind on the market.

NEXT GENERATION FRONT CAMERA MODULE
Magna’s innovative Gen5 system builds on our market-leading camera expertise and global manufacturing processes todeliver a scalable, one-box front camera module delivering long range perception and side detection. The module will befeatured on various platforms across regions and vehicle models over the next few years for a European OEM. The
complete forward facing camera system features a wide field of view with opening angles of 120 degrees horizontallyand 48 degrees vertically. This allows for both long-range perception of obstacles exceeding 160 meters in front of thevehicle, and detection of side objects, such as traffic lights, emergency vehicles and cut-in vehicles. The camera offers
eight megapixels of resolution, a 36 frames per second frame rate and a full colour image. The microcontroller isscalable for sensor fusion with up to five radars.
The system offers features such as: (i) Trained Park Assist (TPA), a parking automation comfort feature thatprovides the driver with an option to park the vehicle automatically with a previously learned “park-in” or “park-out”
trajectory; (ii) Environmental Condition Recognition (ECR) that classifies the current condition of road surfaces
ahead with respect to wetness or snow coverage for piloted driving functions to control the vehicle; (iii) Monocular
Scene Reconstruction (MSR) that detects the transition of drivable to non-drivable areas (e.g., asphalt to grass
transitions); and Hazard Detection (HZD), noticing static obstacles on the road upfront to avoid collisions.

IN-CABIN SENSING SYSTEM
Planned for production in 2024 in multiple OEM vehicle platforms, our innovative radar-based in-cabin sensing system
is designed with the potential to save lives by detecting if a child is left behind in a vehicle. Utilizing radar technology,
our system can detect slight movements caused by heartbeats and breathing. Unlike cameras, our sensors canpenetrate seat structures and operate with lower power requirements. If a child or pet is detected, the system triggers awarning. This advanced system surpasses the functionality of existing audible warning sensors that are linked to therear door opening and closing. The Child Presence Detection functionality assists automakers in addressing theEuropean New Car Assessment Programme (NCAP) 2023/2025 safety protocols. Subsequent planned features include
a seat belt reminder, and vehicle and truck bed intrusion detection.

Magna International Inc.

41

IMPAIRED DRIVING DETECTION TECHNOLOGY
Magna has demonstrated a breath and camera-based pre-development technology designed to combat impaired
driving. Our new impaired driving detection technology determines if drivers are “fit to drive” in a fast, reliable, andaffordable way. The integrated solution combines key elements of the interior sensing system, which utilizes camera
technology to detect driver distraction, drowsiness, and intoxication through pupillary signals, with infrared sensor
technology developed by Senseair, a leader in air and gas sensing. Cockpit-embedded sensors, placed in proximity to
the driver, measure and quantify the alcohol and carbon dioxide levels in diluted exhalations from the driver to passively
detect elevated blood alcohol concentration at or above legal limits.

Innovation Awards
A number of our product and process innovations have received accolades and awards in recent years. Recently, Magna was:◾

A 2024 Consumer Electronics Show (CES) Innovations Award honoree for our Clearview™ Vision System (described above). This
represents our fourth CES award since 2021.
◾ A 2023 winner of a Society of Plastics Engineers (SPE) Automotive Innovation Award in Body Exterior Category for our first-to-market
Thermoplastic Split Gate rear closure system. The complex, deep draw (>80 millimeter) design reduces the number of parts from nine
to three, and uses only two materials (injection molded long-fibre-reinforced thermoplastic polypropylene and thermoplastic olefin).
Two Magna product innovations were named as finalists for the upcoming 2023 Pace Awards. These finalist innovations are Magna’s:◾

Integrated Driver & Occupant Monitoring System, an industry-first solution which reduces packaging
complexities, fully integrates Magna’s high-resolution camera, infrared emitters, and electronic control
unit into the interior mirror of the vehicle and used advanced software to actively monitor the driver’s
head, eye and body movement and sends customizable audible or visual alerts if signs of distracted
behaviour, drowsiness and/or fatigue are detected; and◾

Rear Thermoplastic Swing Doors, an industry-first product that contains recycled materials that are 20 to30 percent lighter than conventional steel solutions, helping to reduce vehicle weight, optimize range,
make them easier to open, and through the use of thermoplastic resin materials, permit greater design
flexibility and detailing, undercut surfaces and tighter radii.

In addition, Magna has been named a finalist for the 2023 Automotive News PACEpilot Innovation to Watch
awards – which acknowledge post-pilot, pre-commercial innovations in the automotive and future mobility
space – for our Modular and Scalable Active Grille Shutter Assembly, and our 100% Melt Recyclable Foam
and Trim.

42

Annual Information Form

8 . C a p i t a l S t r u c t u r e , Fi n a n c i n g s & C r e d i t Ra t i n g s
Capital Structure Approach
Our approach to capital structure remains unchanged from recent years. We aim to maintain the company’s financial flexibility in order toremain in a position to pursue opportunities and withstand an industry downturn, including by:◾

maintaining sufficient liquidity, including committed lines of credit, to run our operations and continue investing in our business throughorganic growth, innovation spending, and acquisitions that fit our product strategy;◾ preserving a strong investment grade credit rating of BBB+ or better, and an Adjusted Debt to Adjusted EBITDA ratio that meets orexceeds the Moody’s Investors Service criteria for a strong investment grade credit rating;◾ growing dividends over time as earnings grow; and◾ repurchasing shares with excess liquidity.
Other core elements of our approach to capital structure and strategy include:◾ lowering our capital spending as a percentage of sales, thereby increasing free cash flow generation;◾ utilizing share repurchases to deploy excess cash not needed for organic growth and acquisitions; and◾ delivering strong Return on Invested Capital.
In light of the above strategy, we have made significant levels of investment in our business in recent years and have also returned significant
amounts of capital to our shareholders in the form of dividends and share repurchases. We had an Adjusted Debt(1) ratio of 1.85 times
Adjusted EBITDA(1) at the end of 2023 and our capital structure strategy remains with a long-term target range of 1.0 – 1.5 times Adjusted
EBITDA. Our Adjusted Debt ratio currently exceeds our target range as a result of our Notes issuances to fund the acquisition of the Veoneer
Active Safety business in 2023 and investments to support new business awards, including in megatrend areas. However, we are committed
to getting into our target range within approximately the next 24 months.

Authorized Share Capital
Our authorized share capital consists of an unlimited number of Common Shares and 99,760,000 Preference Shares, issuable in series, allwith no par value. As of March 20, 2024, the Record Date for our Meeting, a total of 287,280,095 Common Shares were issued andoutstanding. No Preference Shares have been issued or are outstanding.
The following is a brief description of the significant attributes of our authorized share capital and is qualified in its entirety by reference to thedetailed provisions in our charter documents, that set out the attributes of our Common Shares and our Preference Shares.

Common Shares
The holders of our Common Shares are entitled to:◾

one vote for each Common Share held at all meetings of our shareholders, other than meetings of the holders of another class orseries of shares;◾ receive any dividends that may be declared by our Board, subject to the preferential rights attaching to any shares ranking in priority to
our Common Shares; and◾ receive, after the payment of our liabilities and subject to the rights of the holders of any shares ranking in priority to our Common
Shares, all our property and assets available for distribution in the event of our liquidation, dissolution or winding-up, whether voluntary
or involuntary, or any other distribution of assets among our shareholders for the purpose of winding-up our affairs.
For further details of the market for our securities, refer to “Schedule C – Market for Securities”.

Preference Shares
Our Board may, without the approval of any of our shareholders, fix the number of shares in, and determine the attributes of, an individual
series of Preference Shares and issue shares of such series from time to time. The shares of each such series will be entitled to a preference
over our Common Shares, but will rank equally with the Preference Shares of every other series with respect to the payment of dividends
and in the distribution of all our property and assets available for distribution in the event of our liquidation, dissolution or winding-up,
whether voluntary or involuntary, or any other distribution of assets among our shareholders for the purpose of winding-up our affairs. No
Preference Shares have been issued or are outstanding and we do not currently anticipate issuing any such shares. In the event we do issue
Preference Shares in the future, we would expect to issue them solely for legitimate financing purposes and not to block a change of control
transaction.
(1)

Adjusted Debt is calculated by taking our long- and short-term debt and operating lease liabilities and adding pension obligations and certain other Moody’s adjustments.
Adjusted EBITDA is calculated by taking our Adjusted Earnings before Interest and Taxes and adding back Depreciation, operating lease expense, and interest income, andadding adjustments relating to the cash portion of Other Expense, net and pension obligation expenses. In each case, such adjustments reflect a methodology forcalculating such ratios used by Moody’s.

Magna International Inc.

43

Amendments to Share Provisions and Other Matters
The provisions attaching to our Preference Shares, to a series of our Preference Shares and to our Common Shares may not be deleted orvaried without the approval of the holders of the class or series concerned. In addition, no shares of a class ranking prior to or on a parity
with our Preference Shares, or our Common Shares, may be created without the approval of the holders of the class or each series of theclass concerned. Any approval required to be given must be given by two-thirds of the votes cast by those present or voting at a meetingof the holders of the class or series concerned duly called for that purpose in addition to any other consent or approval required by law.

Dividends
The following table sets forth the cash dividends paid and payable on our Common Shares in respect of each quarter for the last three years.

0.50
0.45

$0.43 $0.43 $0.43$0.45$0.45 $0.45 $0.45 $0.46$0.46 $0.46 $0.46 $0.475

0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
Q1

Q2

Q3

Q4

Q1

Q2

2021

Q3

Q4

2022

Q1

Q2

Q3

Q4

2023

We intend to continue paying a quarterly dividend from our cash flow from operations, with the aim of regularly increasing the dividend
consistent with our practice since 2010. Magna’s quarterly dividend has increased for fourteen consecutive years. The declaration andpayment of dividends, including the dividend rate, is reviewed quarterly by our Board and is subject to the Board’s discretion taking into
account our cash flow, capital requirements, our financial condition, and other factors they consider relevant. See “Section 5 – Risk Factors”.

Dividend Reinvestment Plan (DRIP)
Since 1994, we have maintained a dividend reinvestment plan in which registered shareholders have the option to purchase additional
Common Shares by investing the cash dividends paid on their shares.

Financings and Securities/Corporate Transactions
Senior Unsecured Notes
We currently have the following senior unsecured notes outstanding:Issuance Date

Amount Issued

Interest Rate

Maturity Date

June 16, 2014

$750,000,000

3.625%

June 15, 2024

September 23, 2015

$650,000,000

4.150%

October 1, 2025

September 25, 2017

€600,000,000

1.500%

September 25, 2027

June 15, 2020

$750,000,000

2.450%

June 15, 2030

March 10, 2023

C$350,000,000

4.95%

January 31, 2031

March 17, 2023

€550,000,000

4.375%March 17, 2032

March 21, 2023

$300,000,000

5.980%March 21, 2026

March 21, 2023

$500,000,000

5.500%March 21, 2033

March 14, 2024

$400,000,000

5.050%March 14, 2029

The prospectus supplements (or in the case of the 4.95% Canadian dollar-denominated notes, the offering memorandum) which describe
each of the notes above have been filed and are available on SEDAR+ (www.sedarplus.ca).
On November 24, 2023, we repaid at maturity our Euro denominated 1.900% senior unsecured notes originally issued in November 2015.
Credit Facilities
We maintain a $2.7 billion syndicated revolving credit facility (the “Global Credit Facility”), which we amended in April 2023 to (i) cancel the$150 million Asian tranche and allocate the equivalent amount to the Canadian tranche, and (i) extend the maturity date from June 24, 2027,
44

Annual Information Formto June 24, 2028. The facility includes a $150 million Mexican tranche and a tranche for Canada, U.S., and Europe, which is fully transferable
between jurisdictions and can be drawn in U.S. dollars, Canadian dollars, or euros. As at December 31, 2023, no amounts were outstanding
under this facility.
We also maintain an $800 million, 364-day syndicated revolving credit facility that expires on June 24, 2024, and can be drawn in U.S.
dollars or Canadian dollars. As at December 31, 2023, no amounts were outstanding under the 364-day facility.
On March 6, 2023, we entered into a syndicated credit agreement with several financial institutions providing for an unsecured term loan (the“Term Loan”) with a 3-year tranche of US$800 million and 5-year tranche of US$600 million. During 2023, the Company drew $100 million
from the 3-year tranche and $300 million from the 5-year tranche of the Term Loan. The remaining loan commitment amounts under Term
Loan were subsequently cancelled. As at December 31, 2023, $400 million in aggregate was outstanding under the Term Loan.
Commercial Paper Programs
We maintain a euro-commercial paper program (the “ECP Program”) and a U.S. commercial paper program (the “USCP Program”), eachbackstopped by our Global Credit Facility. Under the ECP Program, one of our indirect wholly owned subsidiaries may, from time to time,issue euro-commercial paper notes, subject to an aggregate maximum of €500 million or its equivalent in alternative currencies. Under the
USCP Program, we may, from time to time, issue commercial paper notes, subject to an aggregate maximum of $2 billion or its equivalent
in alternative currencies (increased from $1 billion in March 2023). As at December 31, 2023, we had outstanding issues of $210 million
under the ECP Program and $299 million under the USCP Program.
Normal Course Issuer Bid
On February 13, 2024, the TSX accepted our Notice of Intention (the “Notice”) to Make a Normal Course Issuer Bid relating to the purchaseof up to 300,000 Magna Common Shares (the “2024 Bid”), representing approximately 0.1% of our “public float” of Common Shares. The
primary purposes of the 2024 Bid are purchases for cancellation, as well as purchases to fund our stock-based compensation awards orprograms and/or our obligations to our deferred profit-sharing plans. The 2024 Bid commenced on February 15, 2024 and will terminate nolater than February 14, 2025.
Purchases of Common Shares under the 2024 Bid as of the date of this AIF have been made on the TSX or the NYSE at the prevailingmarket price at the time of purchase and in accordance with the rules and policies of the TSX or in compliance with Rule 10b-18 under the
U.S. Securities Exchange Act of 1934, respectively, or through other published markets, or by such other means permitted by the TSX.
We have purchased the following Common Shares pursuant to the 2024 Bid as at March 20, 2024, and under our previous normal course
issuer bid which commenced on November 15, 2022 and terminated on November 14, 2023 (“2023 Bid”):
2024 Bid

2023 Bid

00

Shares purchased and retained for stock-based compensation awards or programs and/or deferredprofit sharing plans

62,796245,904

Total

62,796245,904

Shares purchased and cancelled

Ratings
As of the date of this AIF, we have been assigned the ratings in the table below:
IssuerRatingCredit Rating Agency

Senior Debt
RatingShort-Term
Debt Rating

Outlook/
Trend

Dominion Bond Rating Service (DBRS)(1)A (low)

A (low)

R-1 (low)

StableMoody’s Investor Services (Moody’s)(2)

A3

A3

P-2

Stable

A−

A−

A-2

Stable(3)Standard & Poor’s (S&P)
Notes:(1) DBRS’s issuer and senior debt ratings are based on its long-term rating scale that ranges from “AAA” to “D” which represents the range from an issuer with the highest credit
quality to one that has filed under bankruptcy, insolvency or winding up legislation or failed to satisfy an obligation after exhausting grace periods. A rating in the “A” rating
category is in the third highest category of the relevant scale of eight major categories and is considered by DBRS to be of good credit quality, with substantial capacity for
payment of financial obligations. “High” and “low” grades are used to indicate the relative standing of credit within a particular rating category. The absence of one of these
designations indicates a rating which is in the middle of the category, excluding the AAA and D categories for which the “high”, “middle” or “low” designations are not used. The
DBRS rating trends provide guidance in respect of DBRS’ opinion regarding the outlook for the rating in question, with rating trends falling into one of three categories – “Positive”,“Stable” or “Negative”. The rating trend indicates the direction in which DBRS considers the rating is headed should present tendencies continue, or in some cases, unlesschallenges are addressed. A “Positive” or “Negative” does not necessarily indicate a rating change is imminent, but rather the trend represents an indication that there is agreater likelihood that the rating could change in the future versus if a “Stable” trend was assigned.
DBRS’s short-term debt rating is based on its commercial paper and short-term debt rating scale that ranges from “R-1 (high)” to “D” which represents the range from an issuer
with the highest credit quality to one that has filed under bankruptcy, insolvency or winding up legislation or failed to satisfy an obligation after exhausting grace periods. A ratingin the “R-1 (low)” category represents the third highest category of the relevant scale of ten major categories and is considered by DBRS to be of good credit quality, with
substantial capacity for payment of financial obligations.

Magna International Inc.

45

(2) Moody’s senior unsecured issuer rating is an opinion as to our future relative creditworthiness. The credit rating is based on a rating scale that, for global automotive suppliers,
ranges from “Aaa” to “C”, which represents the range from those obligations with minimal credit risk to those obligations that are in default with little prospect of recovery. Issuersin the “A” rating category are in the third highest category of the relevant scale of nine major categories and are considered by Moody’s to be subject to low credit risk. The
determination of the overall rating assigned to a global automotive supplier is based on an assessment of an issuer’s performance in five broad weighted categories, some ofwhich are further broken down into a number of weighted sub-factors each of which maps to a specific letter rating in the range above. The indicated rating category for eachsub-factor (i.e., Aaa, Aa, etc.) is then converted into a numeric value, which is then multiplied by the weight for that sub-factor with the results then totaled to produce acomposite weighted-factor score, that is itself then mapped back to an alphanumeric rating based on the ratings range from Aaa to C. Moody’s appends the numerical modifiers
1, 2, or 3 to each generic rating classification from Aa through Caa. The modifiers 1, 2 and 3 indicate that the obligation ranks in the higher end, mid-range, or lower end of its
generic rating category, respectively. The Moody’s rating outlook is an opinion regarding the likely direction of an issuer’s rating over the medium term, and fall into one of four
categories: Positive, Negative, Stable or Developing.
(3) S&P’s issuer credit rating is a current opinion of our overall financial capacity (i.e. credit worthiness) to pay our financial obligations in full and on time. This credit rating is basedon a rating scale that ranges from “AAA” to “D”, which represents the range from extremely strong capacity to meet financial obligations to a failure to pay one or more financial
obligations when it came due. An issuer with a long-term issuer rating in the “A” rating category is in the third highest category of the relevant scale of ten major categories andis considered by S&P to have a strong capacity to meet its financial commitments but is somewhat more susceptible to the adverse effects of changes in circumstances andeconomic conditions than issuers in higher-rated categories. The ratings from “AA” to “CCC” may be modified by the addition of a plus (+) or minus (−) sign to show relative
standing within the major rating categories. The lack of one of these designations indicates a rating that is in the middle of the category. The S&P rating outlook assesses thepotential direction of a credit rating over the intermediate term (typically six months to two years) but is not necessarily a precursor to a rating change.

Credit ratings are intended to provide investors with an independent measure of the credit quality of debt and securities. The credit ratings
assigned to us or our senior debt by the rating agencies are not recommendations to purchase, hold or sell our debt or securities, sincesuch ratings do not address market price or suitability for a particular investor. There is no assurance that any rating will remain in effect for
any given period of time or that any rating will not be revised or withdrawn entirely by a rating agency in the future, if in its judgement,
circumstances warrant. See “Section 5 – Risk Factors – “Credit Ratings Changes” in this AIF. We have made payments in the ordinary
course to the rating agencies listed above in connection with the assignment of ratings on our securities. In addition, we made payments to
Moody’s and S&P in connection with the confirmation of our ratings in respect of the issuance of our Senior Notes and continued issuances
under our ECP Program and USCP Program.

46

Annual Information Form

9 . D i r e c t o r s & E xe c u t i ve O ff i c e r s
D i rectors
Our Board currently consists of the following members:Name & Municipality of ResidencePeter G. Bowie(1)Ontario, Canada
Mary S. Chan
New Jersey, U.S.A.
Hon. V. Peter Harder
Ontario, Canada
Jan R. Hauser(2)Massachusetts, U.S.A.
Seetarama (Swamy) Kotagiri
Michigan, U.S.A.
Jay K. Kunkel
Tokyo, Japan
Robert F. MacLellan(3)Ontario, Canada
Mary Lou Maher
Ontario, Canada
William A. Ruh
Montana, U.S.A.
Dr. Indira V. Samarasekera
British Columbia, Canada
Matthew Tsien
Washington, U.S.A.
Dr. Thomas Weber
Baden-Württemberg, Germany
Lisa S. Westlake
Florida, U.S.A.

Director Since

Principal Occupation

May 10, 2012

Corporate Director

August 10, 2017

Chief Operating Officer, Nikola Corporation and Corporate
Director

January 10, 2020

Senator and Corporate Director

August 1, 2022

Corporate Director

January 1, 2021

Chief Executive Officer of Magna

May 11, 2023

Corporate Director

May 10, 2018

Chairman, Northleaf Capital Partners, and Corporate Director

May 6, 2021

Corporate Director

May 11, 2017

Chief Executive Officer, Lifestyle Solutions Real Estate andCorporate Director

May 8, 2014

Senior Advisor, Bennett Jones LLP, and Corporate Director

May 11, 2023

Corporate Director

January 1, 2022

Corporate Director

May 9, 2019

Corporate Director

Notes:(1) Retiring at the end of the current term on May 9, 2024. Mr. Bowie was a director of Xebec Adsorption, Inc. (“Xebec”) when it sought protection under the Companies’ Creditors
Arrangement Act (“CCAA”) on September 29, 2022. Xebec’s shares were suspended from trading by the Toronto Stock Exchange on the same date and subsequently delisted
on November 14, 2022.
(2) Ms. Hauser was a director of Proterra Inc. (“Proterra”) when it filed a voluntary petition for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code on August 7,
2023. Proterra’s shares were suspended from trading on August 17, 2023. Ms. Hauser’s term as a director of Proterra ended effective March 13, 2024, when it emerged frombankruptcy.
(3) Chairman of the Board.

All of our directors were elected to their present terms of office by our shareholders at our Annual Meeting of Shareholders held on May 11,2023. The term of office for each director expires at the conclusion of the next annual meeting of our shareholders. Each of our current
directors is being nominated for election at the Meeting, except Peter Bowie who has reached his term limit under the Company’s 12 year
Director tenure guideline and will retire from the Board at the Meeting.
All of the directors have held the principal occupations identified above (or another position with the same employer) for not less than
five years, except as follows:◾

Mrs. Chan was Managing Partner of VectoIQ LLP from January 2016 to October 2023;
Mr. Harder served as the Representative of the Government of Canada in the Senate from March 2016 to January 2020;◾ Mr. Kunkel was Executive Vice President for Tenneco Federal Mogul Corporation and President of Tenneco’s Asia operations from
November 2018 to September 2020;◾ Ms. Maher was concurrently the Canadian Managing Partner, Quality and Risk, KPMG Canada and Global Head of Inclusion andDiversity, KPMG International from October 2017 to February 2021;◾ Mr. Ruh was Chief Executive Officer, Digital of Lendlease Group from January 2019 to December 2023; and◾ Mr. Tsien held various roles with General Motors and its group of companies, including Executive Vice President, Chief Technology
Officer, and President, General Motors Ventures from June 2020 to October 2021, as well as Executive Vice President and President,
GM China from January 2014 to June 2020.
◾

With the exception of Mr. Kotagiri, our CEO, all other directors have been determined by our Board to be “independent directors” within themeaning of such term under applicable law.
Magna International Inc.

47

Board Committees
Our Board has four standing committees: Audit Committee; Governance, Nominating and Sustainability Committee (“GNSC”); Talent
Oversight and Compensation Committee (“TOCC”); and Technology Committee.
A copy of our Board Charter, Audit Committee Charter, as well as the charters of our other Board Committees are available on our website(www.magna.com), have been filed on SEDAR+ (www.sedarplus.ca) and EDGAR (www.sec.gov/edgar) and are incorporated by reference
into this AIF. Additional information about our Audit Committee is contained under “Corporate Governance – Report of the Audit Committee”
in our Circular for our Meeting, which is incorporated by reference into this AIF.
Membership of these Committees as of the date of this AIF are as follows:

Audit
Committee

Name

Governance,
Nominating &Sustainability
Committee

TalentOversight &Compensation
Committee

Technology
Committee◾

Peter G. Bowie(1)◾

Mary S. Chan◾
◾

Hon. V. Peter Harder
Jan R. Hauser◾

◾

Jay K. Kunkel◾

◾
◾

Robert F. MacLellan(2)◾

Mary Lou Maher◾
◾

William A. Ruh◾

Dr. Indira V. Samarasekera◾

Matthew Tsien◾

Dr. Thomas Weber◾ Committee Member◾
◾

Lisa S. Westlake
Committee Chair

Notes:(1) Mr. Bowie will retire from his committee assignments in connection with his retirement from the Board at the end of his current term on May 9, 2024.
(2) Chairman of the Board

Additional details regarding our Committee structure can be found in the “Corporate Governance” section of our Circular.

48

Annual Information Form◾

◾

E xecutive O ffi cer s
Our executive officers currently consist of the following persons:Name & Municipality of Residence

Principal Occupation

Seetarama (Swamy) Kotagiri
Michigan, U.S.A.

Chief Executive Officer (since January 2021)

Patrick W.D. McCann
Ontario, Canada

Executive Vice-President and Chief Financial Officer (since January 2022)

John H. Farrell
Ontario, Canada

President (Cosma, Exteriors and Seating) (since January 2023)

Tom J. Rucker
Ontario, Canada

President (MPT, MML, Electronics and Complete Vehicles) (since January
2023)

Bruce R. Cluney
Ontario, Canada

Executive Vice-President and Chief Legal Officer (since July 2020)

Matteo Del Sorbo
Ontario, Canada

Executive Vice-President, Magna New Mobility (since January 2022)

Uwe Geissinger
Hesse, Germany

Executive Vice-President (since February 2021) and President of Magna
Europe (since May 2023)

Aaron D. McCarthy
Ontario, Canada

Executive Vice-President and Chief Human Resources Officer (since
January 2019)

Boris ShulkinMichigan, U.S.A.

Executive Vice-President (since February 2021) and Chief Digital & Information
Officer (since April 2022)

Eric J. Wilds
Michigan, U.S.A.

Executive Vice-President and Chief Sales & Marketing Officer (since
January 2020)

To the extent that our executive officers have not held the offices identified above for the last five years, they have held the following offices
or positions with us and/or have had the following principal occupations during the last five years:◾

Prior to becoming our CEO, Mr. Kotagiri was President, Magna International from January 2020 to December 2020 and Executive
Vice-President and Chief Technology Officer from January 2014 to January 2020. He also served as President, Power and Vision fromMay 2018 to December 2020;◾ Mr. McCann was Senior Vice-President, Finance from May 2019 to December 2021, and Vice-President, Cosma Group from January
2016 to April 2019;◾ Mr. Farrell was President of Cosma International from January 2013 to December 2022;◾ Mr. Rucker was President of Magna Powertrain from October 2019 to December 2022, Senior Vice President, Program Managementand Launch Excellence of Magna Powertrain from April 2018 to September 2019;◾ Mr. Cluney was Executive Vice-President and General Counsel, Power and Vision from July 2018 to July 2020;◾ Mr. Del Sorbo was Vice-President, Business Development from January 2020 to January 2022 and Vice-President, Business
Development – Exteriors, Seating, Mirrors, Closures and Cosma Groups from January 2017 to January 2020;◾ Mr. Geissinger was Executive Vice President, Operational Efficiency from February 2021 to May 2023, President, Magna Electronics
and Senior Vice-President Operations, Power & Vision Group from April 2019 to February 2021, and Senior Vice-President, Fluid
Pressure & Controls Group from January 2017 to March 2019;◾ Mr. Shulkin was Executive Vice President, Technology & Investments from February 2021 to March 2022, Senior Vice-President,
Technology and Development from July 2020 to February 2021, and Vice-President, Research and Development from May 2011 toJuly 2020; and◾ Mr. Wilds was Executive Vice President, Business Development & Strategy, Magna Power and Vision from January 2018 toJanuary 2020.

Magna International Inc.

49

Beneficial Ownership of Securities
As at March 20, 2024, we had 287,280,095 Common Shares issued and outstanding. All our directors and executive officers (as a group
22 persons) owned beneficially or exercised control or direction over 383,854 Common Shares representing approximately 0.1% of theclass, as at March 20, 2024. Our issued and outstanding Common Shares are held as follows:
0.1%
6.1%

93.8%

Public, 269,424,634

North American and European DPSPs, 17,471,607

Directors/Executive Officers, 383,854

10. Legal Proceedings
Regulatory Proceedings
From time to time, the Company may become involved in regulatory proceedings. Magna’s policy is to comply with all applicable laws,
including antitrust and competition laws. Based on a previously completed global review of legacy antitrust risks which led to a September
2020 settlement with the European Commission and a June 2022 settlement with Brazil’s federal competition authority involving in bothcases the supply of closure systems, Magna does not currently anticipate any material liabilities. However, we could be subject to restitution
settlements, civil proceedings, reputational damage, and other consequences, including as a result of the matters specifically referred toabove.

Other
In the ordinary course of business activities, we may become contingently liable for litigation and claims with customers, suppliers, former
employees, and other parties. In addition, we may be, or could become, liable to incur environmental remediation costs to bringenvironmental contamination levels back within acceptable legal limits. On an ongoing basis, we assess the potential of any adverse
judgments or outcomes to these matters, as well as any associated probable costs and losses.
A determination of the provision required, if any, for these contingencies is made after analysis of each individual issue. The required
provision may change in the future due to new developments in each matter or changes in approach, such as a change in settlement
strategy in dealing with these matters.

Warranty, Product Liability and Recall Costs
In certain circumstances, we are at risk for warranty, product liability and recall costs, and are currently experiencing increased customer
pressure to assume greater warranty responsibility. Certain customers seek to impose, partial responsibility for the warranty costs where theunderlying root cause of product or system failure cannot be determined. Due to the nature of the costs, we make our best estimate of the
expected future costs, however, the ultimate amount of such costs could be materially different. For most types of products, we only
account for existing or probable claims on product defect issues when amounts related to such issues are probable and reasonably
estimable. However, for certain complete vehicle assembly, powertrain systems, and electronics contracts, we record an estimate of future
warranty-related costs based on the terms of the specific customer agreements and/or our warranty experience.
Product liability and recall provisions are established based on our best estimate of the amounts necessary to settle existing claims, which
typically take into account: the number of units that may be returned; the cost of the product being replaced; labour to remove and replace
the defective part; and the customer’s administrative costs relating to the recall. In making this estimate, judgement is also required as to theultimate negotiated sharing of the cost between us, the customer and, in some cases a supplier. Where applicable, insurance recoveries
related to such provisions are also recorded.
In December 2023, we received a notification (the “Notification Letter”) from a customer informing us as to the customer’s initial determinationthat one of Magna’s Operating Groups bears responsibility for costs totaling $352 million related to two product recalls. The Notification
Letter has triggered a 90-day negotiation period regarding financial allocation of the total costs for the two recalls. In the event suchnegotiations are not concluded successfully during this period, the customer has discretion under its Terms and Conditions to debit Magnaup to 50% of the parts and labour costs actually incurred related to the recalls. We believe that the product in question met the customer’s
specifications, and accordingly, we are vigorously contesting the customer’s determination. Magna does not currently anticipate any material
liabilities.
50

Annual Information Form

11. Other Information
Additional Information
Our Circular contains the following additional information:◾

our directors’ and named executive officers’ remuneration and indebtedness;
our voting securities and their principal holders; and◾ securities authorized for issuance under our equity-based compensation plans.
◾

Additional financial information about us is provided in our consolidated financial statement as at and for the year ended December 31,
2023, and in our MD&A. These documents and additional information about us may be found on SEDAR+, at www.sedarplus.ca, on
EDGAR at www.sec.gov/edgar and on our website, at www.magna.com.

Interests of Management & Others in Material Transactions
Reference is made to “Interests of Management and Other Insiders in Certain Transactions” in our Circular for our Meeting, which isincorporated by reference into this AIF.

Transfer Agent & Registrar
The transfer agent and registrar for our Common Shares is TSX Trust Company, at its principal offices in Toronto, Ontario set out below. The
co-transfer agent and co-registrar for our Common Shares in the United States is Continental Stock Transfer & Trust Co., at its offices in
New York, NY set out below.
TSX Trust Company
301 – 100 Adelaide St. West
Toronto, ON M5H 4H1

Continental Stock Transfer & Trust Co.
1 State Street, 30th Floor
New York, NY 10004

Telephone: 1-800-387-0825 or 416-682-3860
Fax: 1-888-249-6189 or 1-514-985-8843
Email: shareholderinquiries@tmx.com

Interests of Experts
Our independent auditor for the 2023 fiscal year is Deloitte LLP. Deloitte LLP is independent within the meaning of the Rules of Professional
Conduct of the Chartered Professional Accountants of Ontario, and the applicable rules and regulations adopted by the SEC and the PublicCompany Accounting Oversight Board (United States) (PCAOB). Additional information regarding the fees paid to our independent auditors
is contained under “Business of the Meeting – Reappointment of Deloitte LLP as Magna’s Independent Auditors” in our Circular, which isincorporated by reference into this AIF.

Magna International Inc.

51

S c hedu lesSchedule A
Principal Subsidiaries and Investments
Subsidiaries
A list of our principal subsidiaries and each of their jurisdictions of incorporation as of December 31, 2023, is set out below. Our legal
structure (including that of our subsidiaries) is not necessarily indicative of our operational structure.
Subsidiary(1)(2)

VotingSecurities

Jurisdiction ofIncorporation

1305290 Ontario Inc.
Magna International Investments S.A.
Magna International Automotive Holding GmbH
Magna Automotive Europe GmbH
Magna Automotive Holding GmbH
Magna Metalforming GmbH
Magna Steyr GmbH & Co. KG
Magna Powertrain GmbH & Co KG
Magna Steyr Fahrzeugtechnik AG & Co. KG
Engineering Center Steyr GmbH
Magna Powertrain GmbH
Magna Electronics Foreign Holdco AB
Magna Electronics AB
Magna Automotive Holding (Germany) GmbH
Magna PT Holding GmbH
Magna Financing Luxembourg Canada ULC
Magna US Holding, Inc.
Cosma International of America, Inc.
Intier Automotive of America, Inc.
Intier Automotive of America Holdings, Inc.
Magna Seating of America, Inc.
Magna Exteriors Holdings, Inc.
Magna Exteriors of America, Inc.
Magna Mirrors of America, Inc.
Magna International (Hong Kong) Limited
Magna Exteriors Inc.
Magna Powertrain de Mexico, S.A. de C.V.
Magna Seating Inc.
Magna Internacional de Mexico, S.A. de C.V.
Magna Powertrain Inc.

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

Ontario
Luxembourg
Austria
Austria
Austria
Austria
Austria
Austria
Austria
Austria
Austria
SwedenSwedenGermany
Germany
Alberta
Delaware
Michigan
Delaware
Delaware
Delaware
Delaware
Delaware
MichiganHong Kong
Ontario
MexicoOntario
MexicoOntario

Notes:(1) The table shows the percentages of the votes attached to all voting securities and of each class of non-voting securities, owned by us or over which control or direction is
exercised by us. Parent/subsidiary relationships are identified by indentations. Percentages represent the total equity interest in a subsidiary, which is not necessarily indicativeof percentage voting control.
(2) Subsidiaries not shown each represent less than 10% of our total consolidated revenues and total consolidated assets (although not all subsidiaries shown necessarily each
represent more than 10% of our total consolidated assets and total consolidated sales) and, if considered in aggregate as a single subsidiary, represent less than 20% of our
total consolidated revenues and total consolidated assets.

52

Annual Information FormInvestments
Our principal equity method investments are the following:
Joint Venture

Litens Automotive Partnership
Hubei HAPM MAGNA Seating
Systems Co., Ltd.
LG Magna e-Powertrain Co., Ltd.
BAIC Bluepark Magna Automobile Co.,
Ltd.

Magna Equity
Ownership %76.7%(non-controlling
50% voting interest)
49.9%
49.0%
49.0%

Partner(s)Reporting Segment

Current and retired members of seniorLitens management
Hubei Aviation Precision
Machinery Co., Ltd.
LG Electronics Inc.
Blue Sky New Energy Industry
Investment Co., Ltd.

Power & Vision
Seating Systems
Power & Vision
Complete Vehicles

Magna International Inc.

53

Schedule B
Acquisitions and Divestitures
We have completed a number of acquisitions, divestitures, financings, and securities/corporate transactions in the last three fiscal years,
including those listed below. None of these acquisitions constitutes a “significant acquisition” within the meaning of such term in National
Instrument 51-102 – Continuous Disclosure Obligations of the Canadian Securities Administrators. Additional information about theacquisitions and/or divestitures listed below can be found in Note 7 of our consolidated financial statement as at and for the year ended
December 31, 2023, Note 21 of our consolidated financial statement as at and for the year ended December 31, 2022, and Note 5 of ourconsolidated financial statement as at and for the year ended December 31, 2021.

Acquisitions
Year

Acquisition

2023

100% of the common shares and voting interests of the entities holding theVeoneer Active Safety Business. Veoneer AS supplies active safety products
globally including active safety integration systems, radar, camera systems, internal
cabin sensing, thermal sensing, and light detection.

2022

Investment in Yulu Mobility, an electrified mobility provider in India and together with
Yulu Mobility, establishment of 51% controlling interest in a new battery swapping
entity ("Magna Yuma") to support electrification of mobility and required
infrastructure.

2021

◾

Getrag Ford Transmission GmbH’s non-controlling interest in Getrag (Jiangxi)
Transmission Co., Ltd., a Chinese joint venture controlled by Magna, and afacility in Europe.

◾

65% equity interest and a controlling financial interest in Chongqing Hongli
Zhixin Scientific Technology Development Group LLC.

◾

Klein Automotive, a metalforming operation in Czechia.

Divestitures
Year

54

Divestiture

2023

Sale of the Company’s divisions in Russia

2022

None

2021

◾

Distribution to Ford Motor Company of certain assets of Getrag Ford
Transmission GmbH, a European joint venture with Ford, in connection withmultiple agreements with Ford to operate certain businesses within the joint
venture under separate ownership.

◾

Sale of three Body Exteriors & Structures operations in Germany.

Annual Information Form

Schedule C
Market for Securities
Our Common Shares are listed and posted for trading on the TSX under the trading symbol “MG”, and on the NYSE under the trading
symbol “MGA”.
The high and low sale prices and volume of shares traded for our Common Shares, as reported by the TSX and NYSE, respectively, for themonths during the year ended December 31, 2023 were as follows:
TSX High(C$)

TSX Low(C$)

TSX
VolumeNYSE High($)

NYSE Low($)

NYSE
VolumeJanuary

88.27

77.30

14,205,047

65.99

56.79

21,732,479

February

91.74

71.69

21,604,315

68.92

53.30

32,196,602

March

78.48

68.18

18,456,856

57.64

49.46

21,975,856

April

74.72

68.01

17,281,905

55.82

50.37

17,841,873

May

73.45

65.44

24,655,150

55.09

48.18

30,963,548

June

75.77

65.24

18,199,632

57.26

48.30

17,011,595

July

84.93

74.89

14,462,166

64.50

56.30

20,854,840

August

87.00

73.11

16,523,747

65.27

53.91

33,072,630

September

81.65

70.50

12,719,017

59.91

52.16

18,926,645

October

74.41

65.40

12,088,783

54.74

47.25

20,018,227

November

77.38

64.41

30,840,737

56.44

46.71

31,396,867

December

79.70

71.50

17,379,149

60.32

52.61

18,024,050

Month

Magna International Inc.

55

A p pen d ix 1

Sustainability
ReportFY 2023

A-1

Annual Information FormContents
Sustainability Report
A-6
A-7
A-8
A-13
A-18
A-25
A-41

Summary Sustainability Metrics
Introduction
Sustainability Governance
Climate-Related Opportunities
Climate-Related Risks and Risk Mitigation
Non-Climate Elements of Sustainability
Sustainability Metrics

Magna International Inc.

A-2

Swamy Kotagiri
Chief Executive Offcer

Our Evolving Sustainability Strategy
The automotive industry is undergoing a signifcant transformation as we transition toa net-zero world. This transformation affects how people and goods move, as well as
how we develop and manufacture our products.
At Magna, we are navigating complexities of this evolving sustainability landscape byfocusing our efforts on areas where we can make the greatest positive impact. I am
proud that our efforts are producing tangible results and refect our consistent company
purpose: advancing mobility for everyone and everything, responsibly.
Our commitment to a sustainable enterprise began more than 65 years ago and is thefoundation on which we build today. Our pledge to support the planet is deeply rooted
in our culture. Magna has always been a company that is well respected in the industry
and world for doing what is right – not because we have to, but because we want to.
This report provides a comprehensive overview of our achievements in 2023, but I am
most inspired by what comes next. The groundwork we have laid in recent years willallow us to build on our momentum and further yield signifcant competitive advantage.
Being a sustainable company benefts every Magna stakeholder, touches every partof our business, and is the key to making this world a better place for current andfuture generations.

101187-Magna-2024-AIF-Insides-v6.indd 2

2024-03-28 9:56 AM

Ahmed Elganzouri
Global Director,
Sustainability and Energy

Moving the Needle on Sustainability
Since its inception, Magna has been committed to safeguarding our people, products
and processes. We have taken a proactive approach, constantly evolving our products,
technologies, and operations to lead by example to create a more sustainable future.
As a mobility technology company and one of the world’s largest auto suppliers, Magna
has a unique vantage point. With our presence in many segments of mobility and acrossthe vehicle, our progress in sustainability has the potential to catalyze advancements
throughout the industry. It is our dedication to sustainability and our willingness to evolvethat sets us apart. By setting ambitious goals and adopting a science based approach,
we are gaining momentum and empowering our employees across the world to help makesignifcant progress.
In 2023, we embraced the spirit of evolution in our sustainability strategy, driving positivechange across our business and beyond. We partnered with our customers and communities
to navigate the transition to electric vehicles and implement more effcient manufacturing
processes. We are upholding Magna’s core values and helping to build a more sustainable,
equitable, and inclusive transportation future.
As we accelerate change within our company and the automotive industry, we are optimisticthat even greater opportunities to make a difference lie ahead.

101187-Magna-2024-AIF-Insides-v6.indd 32024-03-28 9:56 AM

Evolving Our Commitment to a Sustainable Future
The fght against climate change is leading to signifcant transformation in the mobility sector.
As a global leader within the industry, Magna has set itself ambitious net-zero targets. Magna
has approved near and long-term science based emission reduction targets with the Science
Based Targets initiative (SBTi), and the SBTi has verifed Magna’s net-zero science-based target
by 2050.
Magna’s Decarbonization Targets
TargetTarget Year

Status1-year 5% energy savings in implemented energy projects(From 2022 absolute energy usage)

2023

Achieved

1-year 5% energy intensity reduction (Compared to 2022)

2023

Exceeded

1-Year 10% energy intensity reduction (Stretch goal) (Compared to 2022)

2023

Exceeded

2-Year 10% energy intensity reduction (Compared to 2022)

2024

On Track

Environmental, Social and Governance (ESG) scoring for 90% of supplier spend

2025

In Progress

100% renewable electricity in European operations

2025

On Track

5-year 20% energy intensity reduction (Compared to 2022)

2027

On Track

100% renewable electricity in global operations

2030

On Track

25% reduction in value chain (Scope 3) emissions from 2021 baseline(Near-term science-based target)

2030

In Progress

42% reduction in global operational (Scope 1 & 2) emissions from 2021 baseline(Near-term science-based target)

2030

On Track

Net-zero emissions reduction (90% absolute reduction in Scopes 1, 2 & 3)
(Long-term science-based target)

2050

In Progress

Where
We AreYear OverYear Progress

Where
We Are Going% of global electricity used that is renewable electricity

22%+500bps

39%
Expected by 2025

Divisions using renewable electricity

103

+42

>170
Expected by 2025

Divisions with 100% renewable electricity

75

+14

>150
Expected by 2025

Divisions with on-site solar generation

18

+12

19
In progress orcurrently investigating

101187-Magna-2024-AIF-Insides-v6.indd 1

2024-03-28 9:56 AM

S ummar y Su st a i n a b i l i ty M et r i c s
TOPIC
Emissions

ISSB CODEISSB S2, 29(a)(i)ISSB S2, 29(a)(i)ISSB S2, 29(a)(i)TOPIC

SASB CODE

EnergyManagement

TR-AP-130a.1

—

Waste
Management

TR-AP-150a.1

—

Water
Management

Environmental
Management

Competitive
Behaviour

Health and Safety

Gender Diversity——

TR-AP-520a.1——

METRIC
Scope 1 emissions
Scope 2 emissions(1)Scope 3 emissions(3)UNIT OF MEASURE
Metric Tons (t) CO2e
Metric Tons (t) CO2e
Metric Tons (t) CO2e

MAGNA 2023 DATA(2)424,561 t
1,150,656 t
58,655,441 t(4)CHANGE FROM
2021 BASELINE(3)↓ 2.7%↑ 5.6%—METRICUNIT OF MEASURE

MAGNA 2023 DATA(2)CHANGE FROM
2019 BASELINE(3)Gigajoules (GJ)
MegaWatt hours (MWh)20,077,657 GJ
5,577,127 MWh↓ 11.0%% of energy consumed supplied
from electrical grid

Percentage (%)

59.2%↑ 240 bps

% of energy consumed that isrenewable energy

Percentage (%)

12.9%

—

Energy intensity

MegaWatt hours (MWh) /Sales (USDm)

130 MWh / USDm

↓ 19.8%Energy intensity reduction

MegaWatt hours (MWh) /Sales (USDm)

Target: ≥5% p.a.
Actual: 10.6% (2023)—

Aggregate amount of waste
generated from manufacturing
operations

Metric Tons (t)1,365,712 t—% of waste generated that ishazardous

Percentage (%)

3.9%

—

% of waste generated that wasrecycled

Percentage (%)

91.8%

—

% hazardous waste diverted fromlandfill

Percentage (%)

91.8%

—

Waste diversion from landfill

Percentage (%)

Target: ≥95% p.a.
Actual: 96.2% (2023)—

Annual water withdrawals

Megalitres (ML)6,571 ML↓ 15.1%

Water reduction

Percentage (%)

Target: 1.5% p.a.
15% by 2030 (vs. 2019)
Actual: 15% (2023)—

Annual remediation expenses

Reporting Currency (USD)<$1.0m

No Change

Aggregate remediation balance for
known events

Reporting Currency (USD)$18.8m↑ 40.3%

Environmental violations > $10,000
USD

Number

1—

Amount paid as a result of suchenvironmental violations

Reporting Currency (USD)$30,000—

Total amount of monetary losses
incurred as a result of legal
proceedings associated with
anti-competitive behaviour
regulations

Reporting Currency (USD)

NIL—

Accident frequency rate

1.0 = 1 injury / illness per
100 employees working
40 hours/week, 50 weeks/year

0.50↓ 51.9%Accident severity rate

10.0 = 10 lost work days /100 employees working
40 hours/week, 50 weeks/year

10.22↓ 17.3%% of employees who are women(5)Percentage (%)

28.0%

—

% Women in Critical Positions

Percentage (%)

18.0%

—

% Women on the Board of Magna

Percentage (%)

38.0%(6)↑ 200 bps

Aggregate amount of energy
consumed

Notes:(1) Market-based emissions calculation method.
(2) 2023 data with respect to emissions, and water withdrawals have been verified by an independent third-party verification firm. Energy management, waste management, andhealth and safety data is preliminary.
(3) Items indicated by a dash were not tracked in applicable baseline year. We have used a 2021 baseline for our emissions reporting in line with our science-based near-term andnet zero targets. We have used a 2019 baseline for other metrics consistent with our previous sustainability reports. Our 2023 Scope 1 and 2 emissions represent reductionsof 17.8% and 28.5%, respectively against our original 2019 baseline.
(4) Scope 3 emissions data reported is based on 2021 and represents our baseline Scope 3 emissions calculated in connection with our science-based near-term and net-zerotargets submission in 2023. We performed an inventory covering all 15 Scope 3 emissions categories. Our Scope 3 emissions data includes all relevant categories. Categories
8, 13, and 15 are not relevant to Magna.
(5) Wholly owned operations only.
(6) As of May 9, 2024, the percentage of women on the Board will be 42%, assuming election of all nominees for Magna’s annual meeting of shareholders.

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Int r od u ctio n
At Magna we are committed to making a difference through our products and processes, as well as continuing to demonstrate care andconcern for our people and the communities in which they live.

Magna’s Climate Change Commitment
We recognize the reality of climate change and its impact on the planet. As a result, we are focused on doing the right things today so that
our corporate interests do not come at the expense of the viability of life for the generations that follow. Although combating climate change
requires a collective global response, Magna is determined to play its part in addressing this existential threat to our planet. We took asignificant step in 2023 when we submitted our near-term and net-zero emission reduction targets for validation by the Science Based
Targets initiative (“SBTi”). Magna has approved near and long-term science-based emission reduction targets with the SBTi, and the SBTi
has verified Magna’s net-zero science-based target by 2050.
The details of Magna’s net-zero commitment are outlined in Section 1.4 this Sustainability Report.
Approach to Sustainable Value Creation
Overall, our approach to sustainable value creation involves:◾

designing, engineering, manufacturing and delivering innovative product solutions for our customers, which achieve shared goals of
reduced weight, lower fuel consumption and reduced carbon emissions;◾ optimizing and innovating our manufacturing processes for resource and input efficiency, as well as product quality;◾ enhancing the energy efficiency of our plants and transitioning to 100% renewable energy by 2030 to achieve our SBT requirement to
reduce scope 1 and 2 emissions by 42% from a 2021 baseline;◾ engaging our supply chain to reduce Scope 3 emissions 25% by 2030 from a 2021 baseline;◾ staying focused on our net-zero commitment to reduce scope 1, 2 and 3 emissions 90% by 2050 from a 2021 baseline;◾ treating our employees fairly and looking out for their health, safety and general well-being;◾ serving as a good community partner, particularly in the communities in which our employees live and work; and◾ enhancing the sustainability of our supply chain with respect to human rights and working conditions through communication,
monitoring, and where necessary, corrective action.

Governance

Strategy

RiskManagement

Metrics andTargets

A-7

Annual Information Form

This Sustainability Report aims to provide our stakeholders with a better understanding of how
we approach the creation of sustainable, long-term value and our management of sustainabilityrelated risks. The report has been structured to align with the International Sustainability
Standards Board (ISSB) IFRS S1 and S2 Climate Related Disclosures Standards, as well as theSustainability Accounting Standards Board’s (“SASB”) Auto Parts accounting standard, where
possible. This includes, for the first time, reporting of our (2021 baseline) Scope 3 emissions.
While this report may not currently provide stakeholders with all the information sought throughthe ISSB and SASB frameworks; we continue to evolve and enhance our disclosure as ourcollection and validation of the applicable data improves. While the ISSB and SASB Auto Parts
frameworks primarily address climate-related factors, this Sustainability Report aims to go beyond
such items to give stakeholders a better understanding of the broad range of environmental,social and governance initiatives that define our approach to sustainable value creation.

1.
1.1

Sust ain a b i l i ty G over n a nc e
Board Oversight

Magna’s Board of Directors is the company’s highest decision-making body, except to the extent certain rights have been reserved forshareholders under applicable law or Magna’s articles of incorporation or by-laws. As such, the Board is responsible for the overall
stewardship of the company by: supervising the management of the business and affairs of Magna in accordance with the legal requirements
set out in applicable company law (Business Corporations Act (Ontario)), as well as other applicable law; and, jointly with Management,
seeking to create long-term shareholder value. The Board operates under a written Board Charter, in addition to applicable law, our articles
of incorporation and by-laws. The Board Charter, which has been filed with securities regulatory authorities on SEDAR+ (www.sedarplus.ca),
and is available in the Leadership & Governance section of Magna’s website (www.magna.com), delineates Board oversight responsibilities
including with respect to a number of areas relevant to sustainability such as: corporate culture; corporate governance; strategy; risk;
shareholder engagement; and fundamental corporate actions.
The Board takes an integrated and coordinated approach to oversight (including climate-related issues). This includes oversight of:◾ the Company’s corporate culture, including its commitment to innovation/R&D, as well as its overall approach to corporate governance;◾ long-term strategy, including sustainability strategy and near-term business plans;◾ fundamental corporate actions, including acquisitions/divestitures and capital allocation;◾ major corporate policies;◾ enterprise risk management, including sustainability risks;◾ our overall system of compensation of Executive Management, rooted in profitability and which drives desired management behaviours
that are central to our climate strategy, including operational efficiency and acceleration of electrification activities.
◾ material public disclosures (including this Sustainability Report);◾ preparedness of the Company to comply with emerging sustainability/ESG related legislation; and◾ shareholder engagement, including on sustainability/ESG topics.
Climate-related and other sustainability issues are typically considered by the Board at least annually through the Board’s strategic planning
process. Typically, Magna’s most senior corporate R&D executive identifies and analyses material “megatrends” impacting the automotive
industry, including automotive and mobility trends arising from climate-related issues. Significant opportunities and risks are then addressedat the annual Board strategy meeting, while Operating Group Presidents address the opportunities and risks applicable to their respective
business units at the annual business planning meeting. Guidance, feedback and other outputs from the strategy meeting are incorporated
and integrated into business unit business plans for the next business planning meeting. Sustainability issues may also arise before theBoard in connection with its oversight of fundamental corporate actions such as review/approval of material acquisitions/divestitures,
three-year business plans and capital expenditures. Additionally, the Board annually monitors our progress in reducing our carbon footprint
and reviews/approves the company’s material public disclosures, including our Annual Information Form / Annual Report on Form 40-F
incorporating this Sustainability Report.
1.1.1

GNSC and TOCC Roles

The Board carries out its duties in part through standing committees composed solely of independent directors. One such committee, the
GNSC, supports the Board’s oversight of the company’s approach to sustainability and climate change issues to ensure alignment with
Magna’s overall strategy, including by assessing Magna’s overall approach to decarbonization of its operations, environmental compliance,
the Company’s approach to human rights and supply chain due diligence, the continued effectiveness of the Company’s ESG management
programs, as well as Magna’s actions to identify, monitor and mitigate any material risk exposures relating to such areas. The Board’s TOCC
also supports the Board’s sustainability oversight activities by assessing Magna’s approach to certain non-climate elements of sustainability,
including its approach to advancing diversity and inclusion in our workplace, and occupational health and safety compliance, as well as
Magna’s actions to identify, monitor and mitigate any material risk exposures relating to such areas.
Like the Board, the GNSC and TOCC maintain a written charter which outlines its specific roles and responsibilities. The GNSC and TOCC
Charters have been filed on SEDAR+ and is available in the Leadership & Governance section of Magna’s website (www.magna.com).
Matters under the GNSC’s responsibility include: corporate governance, sustainability, and other matters. The scope of the GNSC’s
oversight role with respect to sustainability includes climate-related issues generally, as well as related elements such as environmental
management and compliance. As Magna defines “sustainability” in a broad and inclusive manner to include areas that go beyond climaterelated issues, the GNSC’s role also extends to matters such as supply chain sustainability. The GNSC periodically reviews Magna’s
policies, practices and public disclosures relating to sustainability topics, and makes recommendations to the Board regarding such items.
During 2023, the GNSC received updates on Magna’s evolving sustainability strategy, its development of science-based near-term andnet-zero targets, progress towards its decarbonization and renewable electricity targets, and its activities in relation to supply chain
monitoring. The GNSC also reviewed, provided input into, and approved the organization’s Sustainability Report and presented its
recommendations to the Board regarding the Board’s approval of the Sustainability Report. Additionally, the GNSC received reporting
relating to the performance of Magna’s environmental compliance and management program. The TOCC’s responsibility include: talentmanagement and succession planning, executive and incentive compensation, employee health and safety, and other matters. During
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2023, the TOCC received updates on Magna’s occupational health and safety management program, leadership development andsuccession planning, culture and employee engagement, and diversity and inclusion activities.
1.1.2 Other Board Committees
In addition to the GNSC and TOCC, the Board maintains two other standing committees – the Audit Committee and the Technology
Committee. While neither of these committees have specific sustainability responsibilities, each may have a role with respect to sustainability
risks and opportunities that arise indirectly out of the committee’s primary role and responsibilities.
Magna’s Audit Committee supports the Board through its oversight of financial and audit-related matters, including financial risks anddisclosures. To the extent that climate-related or other sustainability risks are or could be financially material, the Audit Committee would be
involved through its consideration of the financial statement or other disclosure of the nature and scale of the risk. During 2023, the Audit
Committee received updates on financial reporting of sustainability matters, and Magna’s Ethics and Legal Compliance Program, including
administration of our Code of Conduct and Ethics, compliance training initiatives, and activities of the Company’s Compliance Council.
The Technology Committee supports the Board’s oversight duties by advising it on technology trends, related opportunities and risks, R&D
and innovation, and technology-focused acquisitions, as well as the alignment between the company’s technology and its strategic priorities.
As such, the scope of the Technology Committee’s role includes products and processes that seek to realize opportunities created byclimate-related challenges. In this regard, the Technology Committee engaged in “deep dive” reviews of technology trends, opportunities
and risks, including battery enclosures technology landscape, integrated systems, digital transformation and automation and Factory of the
Future. In addition, the Technology Committee reviewed Magna’s R&D/innovation initiatives in relation to Magna’s overall strategy.

1.2Management

Climate-related issues are part of the CEO’s responsibility. As Magna’s highest-ranking member of management, the CEO guides anddirects Executive Management and Operating Group Presidents with respect to product portfolio and strategic planning, business planning,
capital expenditures, innovation/R&D, manufacturing productivity and efficiency, as well as other critical areas, including the setting of thenear-term and net-zero commitments announced by Magna in 2023. The CEO is also the highest executive responsible for customer
management, shareholder engagement/investor relations, as well as talent management. The criticality of climate sustainability to the futureof the automotive industry generally means that climate-related issues are interwoven through all of the foregoing areas of the CEO’s
responsibilities. At the same time, the importance of making demonstrable progress with climate sustainability goals requires CEO-level
engagement and direction to ensure organizational alignment.
To assist our CEO, one of Magna’s Presidents functions as an executive “champion” for climate-related sustainability matters (the“Sustainability Champion”). The Sustainability Champion reports directly to Magna’s CEO on sustainability matters and helps coordinate
and align sustainability priorities across the company’s Operating Groups. Operating Group management is responsible for development of
product strategies to address megatrends, industry trends, and business opportunities and risks, including those which arise due toclimate-related challenges.
We also have a bottom-up sustainability structure (See Magna’s Decarbonization Organizational Structure below) with representatives at
each of our three main management levels (Divisional, Operating Group and Corporate). Approximately 95% of our manufacturing Divisions
have an energy management champion who works with members of our Global Energy Team to identify and implement high-priority energy
management projects. The Global Energy Team functions across all of our Divisions and Operating Groups to share energy efficiency/
management case studies and best practices. Each Operating Group’s day-to-day sustainability activities are coordinated through a Groupsustainability “lead”. Operating Group sustainability leads routinely interact with our Global Director, Sustainability & Energy who oversees
and tracks key sustainability metrics and KPIs, such as the energy reduction goals. The Global Director, who reports to the Sustainability
Champion, collaborates with Operating Group sustainability leads and cross-functional corporate leaders, including operational
improvement, environmental, purchasing, legal, finance, real estate, to develop Magna’s long-term sustainability and decarbonization
strategy and near-term goals. In connection with our evolving sustainability strategy and our commitment to reaching our near-term andnet-zero targets, our energy reduction progress and initiatives are reported to our Sustainability Champion, helping to increase the visibilityof these initiatives across our Operating Groups through the Sustainability Champion’s regular interaction with Operating Group Presidents.
A number of initiatives intended to help us achieve our near-term and net-zero targets are underway, including energy optimization initiatives
at most of our operating Divisions and a phased in transition to renewable electricity globally. In 2023, we launched new initiatives within our
Operating Groups focused on Life Cycle Assessments (LCA), Sustainable Materials and Supply Chain Decarbonization. Each initiative is led
by an Operating Group-level champion in their respective subject matter that directly supports the execution of our decarbonization strategy.
LCA Champions oversee Operating Group LCA processes and requirements, including understanding frameworks governing LCAs andcustomer requirements. Sustainable Materials Champions assist in the development of sustainable materials sourcing plans, identify potential
sustainable materials relevant to current and future products, identify and oversee participation in sustainable materials certification schemes,
and support our purchasing team in communicating with OEM customers and suppliers on relevant sustainable materials topics. Supply
Chain Sustainability Champions assist on all ESG related supply chain topics for their Operating Groups and support supplier ESG monitoring
and corrective action. They will also oversee Operating Group compliance with ESG nomination criteria being developed.
A-9

Annual Information Form

Magna’s decarbonization organizational structure is as follows:

Magna Board of Directors
and its standing committees including GNSC

CEO

Executive Leadership
CFO|CHRO|CLO|CDIO|CSMO

Operational Group Presidents& Executive Teams

Global Director, Sustainability & Energy

Group Sustainability Leads

Global Functional Teams

Global Sustainability TeamGroup/Division Sustainability Teams

Finance
Health, Safety & Environmental
Information Technology
LegalMarketing & Communications
Purchasing
Research & Development

Decarbonization Team
Energy Team with Regional Leads
Product Sustainability
Reporting & Disclosure
Supply Chain & ProductSustainabilityGroup LCA Champions
Group Supply Chain
Sustainability Champions
Group Sustainable Materials Champions
Division Sustainability Champions
Division Energy Champions

Aspects of sustainability beyond climate change concerns are typically managed through a matrix structure in which corporate-wide
functions support initiatives implemented or managed by Operating Groups and Divisions. Examples of functional areas managed in thismanner include: environmental management and compliance; occupational health and safety; quality and operational improvement; talentmanagement, including diversity and inclusion; ethics and legal compliance; lobbying and political engagement; cybersecurity; data privacy;
and supply chain management.

1.3

Evolution of Our Sustainability Program

In 2023, our Sustainability program evolved in a number of ways, including:◾ Establishing global near-term (to 2030) and net-zero (to 2050) science-based targets (discussed in detail in Section 1.4 of thisSustainability Report).
◾ Our near-term science-based target aims to achieve a 42% reduction in Scopes 1 and 2 emissions, and a 25% reduction in Scope
3 emissions by 2030, from a 2021 baseline. In support of our near-term commitment, we are targeting 100% renewable energy in
our European operations (by 2025) and globally (by 2030).
◾ Our net-zero science-based commitment requires a 90% reduction in Scope 1, 2 and 3 emissions by 2050 from a 2021 baseline.
◾ Introducing a net-zero module to Magna’s global Fundamentals of Sustainability Training, which was rolled out in 11 languages andcompleted by approximately 66,000 employees since the training was introduced in 2022. The training provides a review ofsustainability basics and their relation to our business, and helps our organization continue to cultivate interest, ideas and opportunities
for improving our operations, products and our world in general.
◾ Launching new initiatives within our Operating Groups focused on Life Cycle Assessments (LCA), Sustainable Materials and Supply
Chain Decarbonization. Each initiative is led by an Operating Group-level champion in the respective subject matter that directly
supports the execution of our decarbonization strategy. These initiatives will help Magna continue to integrate sustainability within ouroperations and make progress on our near- and long-term decarbonization goals.
◾ Rolling out a new supplier roundtable program. The objective of this round table program is to initiate a dialogue and collaboration
between Magna and our suppliers to promote sustainability practices across the supply chain. The focus is on sharing best practices,
discussing challenges, and identifying opportunities for improvement in sustainability initiatives.
◾ Continuing to grow our annual Commitment to Sustainability Awards that recognize how sustainable activities benefit our Divisions,
our environment, and all stakeholders. In 2023 we received approximately 300 submissions, an increase of over 60%, year-over-year.
Our Sustainability awards winners are detailed on pages A-39 and A-40 of this Sustainability Report.
◾ Aligning the sustainability module in our MAFACT system to our net-zero commitment. The module includes five scoring levels thatassess a Divison’s performance on sustainability, including: carbon/air emissions, water usage, waste, and support for United Nations
Sustainable Development Goals. Scoring is based on development of a strong foundation for data collection (level 1) through toachieving 100% Renewable Energy (level 5).
◾ Implementing a Sustainability Ambassador program that aims to educate, inspire and create relationships across Magna from senior
management to Divisional employees. The inaugural meeting took place in December 2023, and included the participation of nearly
150 employees from across the world.
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1.4

Magna’s Net-Zero Commitment

1.4.1

Science Based Targets

The fight against climate change is leading to major transformation in the mobility sector. As a global leader within the industry, Magna has
set ambitious targets as discussed under Magna’s Climate Commitment on page A-7.
Magna prides itself on continuous improvement and innovation. For over 65 years, we have showcased our commitment to design anddeliver some of the most sophisticated mobility solutions; and we continue to leverage this ingenuity and entrepreneurial spirit to tackle oneof our world’s most pressing challenges: climate change. Focus is needed on true decarbonization and elimination of carbon to keep global
warming below 1.5 degrees according to the latest Intergovernmental Panel on Climate Change (IPCC) 2023 Climate Change Report. To
meet our communities’, customers’, and stakeholder expectations, Magna has evolved its previous carbon neutrality commitment to thescience based near-term and 2050 net-zero commitments.
Magna’s pursuit of net-zero begins with our near-term commitment of 42% reduction in Scopes 1 and 2 emissions, and 25% reduction in
Scope 3 emissions by 2030, each from a 2021 baseline. Our near-term commitments are the launch point towards our net-zero by 2050
commitment which requires 90% reduction in Scope 1, 2 and 3 emissions from a 2021 baseline, as required by the SBTi Net-Zero
Standard.
1.4.2

Roadmap for Fulfilling Our Commitment

Achieving net-zero is an ambitious and complex challenge. We have taken the first step to indicate our commitment and outline our net-zeroemissions strategy. We have also developed a framework through collaboration with internal and external stakeholders. By leveraging
experts across all Operating Groups and Divisions to identify the most appropriate technical solutions, while monitoring for emerging
technologies, we will continue to progress towards our net-zero goal. Our strategy and roadmap will continue to evolve, including throughthe development of climate scenario analysis and a formal climate transition plan as discussed in Section 1.4.3 below.
We are focused on the following four pillars as we continue to evolve our net-zero roadmap:

Awareness +Engagement

Data
Collection

Strategy +Roadmap

Training and dialogue
to understand andbuild needed tools

Develop data
platforms & rollout
internal policies andrequirements

Identify feasible
cost-viable
technologies andsolutionsExecution
Implementation of
decarbonization
initiatives

As Magna carries out activities within each pillar, with support from Operating Groups and Divisions, our focus will continue to be on energy
conservation and reduction. In the near-term, our net-zero commitment is supported by our goal of achieving 100% renewable electricity inEurope by 2025 and globally by 2030. To support this effort, Magna’s Global Energy Leads have been integrated directly into our global
sustainability organization. Each Division’s Energy Champion is critical to achieving our net-zero commitments working to deliver emission
reductions, as well as cost savings and risk minimization. Progress is already being made in our manufacturing operations which
implemented approximately 280,000 MWh of energy saving projects in 2023. Magna also successfully achieved its 2023 stretch goal of a
10% energy intensity reduction (compared to the prior year).

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Annual Information FormMAGNA’S ROAD TO NET-ZERO

1.4.3

Evolution of our Roadmap

Over the next 12 months, Magna expects to complete a double materiality assessment, scenario analysis and develop a climate transition
plan to further evolve our commitment to sustainability and transparency. A double materiality assessment is a tool we will use to evaluate
environmental and social risks and opportunities through the lens of financial and impact materiality. Scenario analysis enables us to support
our net-zero strategy by exploring various future pathways based on different climate scenarios. A climate transition plan will act as a
blueprint for achieving net-zero.
1.4.4

Addressing Scope 3 Emissions

Magna has established near term energy saving goals (details on page A-16) and renewable electricity goals (details on page A-11) to tackle
our Scope 1 and 2 emissions. For Scope 3 emissions, our near-term and net-zero targets are reductions of 25% by 2030 and reductions of
90% by 2050, respectively, taking into account all 15 emissions categories (12 of which are relevant to Magna). While Magna intends towork on reducing the impact in all relevant categories; there will be a significant focus on category 1 (Purchased Goods and Services) andcategory 11 (Use of Sold Product) which account for the vast majority (approximately 90%) of our Scope 3 emissions based on our current
Scope 3 emissions inventory. Two working groups (discussed above): Sustainable Materials, and Supply Chain Sustainability, have beencreated with a champion from each Operating Group and led by the Magna’s Global Sustainability Team. These cross-functional groups
contribute in-depth knowledge on commodities and technologies that will be instrumental in executing our net-zero strategy.

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2.
2.1

Climate- R el a ted O p p or t u n i t i e s
Corporate Strategy

The automotive industry is being defined by a number of global megatrends that have shaped our long-term strategy, including:
Megatrend
Globalization

Industry built through globalization appears to be undergoing regionalization

Environmental Impact

Concern for environment/climate change driving vehicle electrification,
including through acceleration of sustainability-related legislation

Natural Resources & Energy

Access to critical battery minerals and availability of sufficient renewableenergy may define success of drive to vehicle electrification

Demographic Change

Product design will be influenced by aging population

Digital Transformation

Connectivity and digitization impact both product and process. New vehiclearchitectures that connect the subsystems along with software functionality
creates additional value to products. Process is also impacted due toincreased digitization, driven by increased requirements for productivity andquality

Individualism

Product design will be influenced by growing individualism, including desire forgreater personalized experiences

Health & Well-Being

ADAS and autonomy take rates will be driven both by consumer preferences
as well as regulatory requirements tied to increased safety

Urbanization

Continued growth in urban population will lead to changes in mobility as aresult of increased density and congestion with an increase in EV adoption
and new transport modalities

New Mobility

Emerging new mobility eco-system offers a range of potential opportunities for
new products and services, including automated delivery and mobility
solutions

EconomySociety

Mobility

Impact on Automotive

We have distilled the impacts of the global megatrends into four long-term strategic factors which we see defining the “Car of the
Future” – electrification, autonomy, new mobility, and connectivity. We believe we are well-positioned to capitalize on opportunities in eacharea:
We possess an enhanced e-Powertrain portfolio with a range of products that addresses the roadmap for the transition
to EVs. We continue to win new EV business.

We possess full ADAS capability and complete ADAS system expertise. We take a systems level approach in developing
ADAS building blocks for OEM customers with a focus up to level 2+/3 ADAS capabilities.

We have expanded our collaboration ecosystem and continue to look for opportunities to leverage new business models.
The breadth of our capabilities make us a key enabler of OEM customers and new entrants in the New Mobility space.

We possess software-enabled functionality in our electronic control unit-related products. This functionality could help
optimize performance and efficiency in connected products, such as our connected powertrains.

A-13

Annual Information FormWe have developed our corporate strategy to realize the opportunities from these trends. Key elements of such strategy include:
Increasing capital deployment toward high-growth areas aligned with the “Car of the Future”
We are proactively managing our portfolio and evolving our product mix based on alignment with the Car of the Future, which we see aselectrified, connected, assisted/autonomous, personalized and sustainable. We seek to grow our business and capabilities in areas which
are positively impacted by the megatrends discussed earlier through an approach that emphasizes functionally integrated solutions, systems
development, and cross-group collaboration. Examples of such areas include powertrain electrification, ADAS and battery enclosures, aswell as our contract vehicle manufacturing operations. As illustrated below, we believe that a substantial proportion of our product areas are
not adversely impacted by the global megatrends, including our body, chassis, lighting, active aerodynamics, dual clutch transmissions,mirrors, mechatronics, and seating products. The strong returns and cash flow from these product areas enable us to fund the R&D andcapital investments required to realize the opportunities in high-growth products which are benefiting directly from the global megatrends.

Impact of Megatrends

Magna Sales over time
Positive • eDrives and Components
Impact • Battery Enclosures••••
Aligned ••••Active Safety

Lighting
Active Aerodynamics
Body & Chassis
Dual Clutch Transmissions
Mirrors
Mechatronics
Seating

Negative • Manual Transmissions
Impact • 4WD/AWD•

Fuel Tanks

Complete Vehicles

2020

FUTURE

Lastly, there are elements of our product portfolio which are negatively impacted by the global megatrends and are expected to be lessdirectly relevant to the Car of the Future. Examples of such products include manual transmissions, mechanical AWD/4WD systems and fueltank systems. Despite their declining long-term strategic importance, our assets and expertise associated with these products remain
relevant to, and can be redeployed for, growing product areas aligned with the Car of the Future.
Driving Operational Excellence
We are committed to manufacturing excellence. We continue to elevate our approach to manufacturing by implementing "factory of the
future" initiatives including: enhanced use of big data and analytics; advanced robotics, additive manufacturing and augmented reality. The
ultimate goal is to achieve greater profitability through further enhanced quality, production efficiency, reduction of floor space and improved
return on investments. Critical elements of our approach to operational excellence include our operational excellence initiatives and MAFACT
operating system, which are discussed in “Section 6 – Description of the Business – Manufacturing & Engineering” in our AIF. Additionally,
our sustainability strategy dovetails with our efforts around operational excellence, due to the focus on energy optimization and minimizationof water withdrawals, as well as waste streams to landfill.
Unlocking New Business Models and Markets
The new mobility landscape, which is generally urban, electrified, autonomous and connected, is creating new business models andmarkets. We believe that our systems and complete vehicle knowledge, including elements of our portfolio such as EV and ADAS platforms,
provide us with an advantage in pursuing such opportunities. In addition, our ability to use capital efficiently, launch programs reliably andhelp speed products to market, makes Magna a key enabler of new entrants. Additionally, we are using our capabilities and platform
technologies to enter the micromobility market. For example, we invested in the Yulu electrified two-wheeler shared mobility business inIndia and related battery-swapping business and have a number of activities underway involving Magna-developed and third partydeveloped robots for potential industrial and last-mile delivery applications.
Our long-term strategy is well-aligned with climate change-related trends impacting the automotive industry, including vehicle electrification,
operational efficiency to minimize manufacturing inputs and waste outputs, as well as the pursuit of new mobility business models. We
cannot determine for certain how quickly the market for the declining products in our portfolio may deteriorate, but products such as
AWD/4WD systems appear to have continuing relevance for the next decade. However, we believe that our physical assets, human capitaland know-how related to the mechanical solutions can be repurposed as vehicle development plans migrate toward electrified AWD/4WD
solutions. We currently offer multiple alternatives to manual transmissions, including efficient dual-clutch, hybrid dual-clutch and dedicated
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A-14

hybrid transmissions, as well as complete e-drive systems, and expect to be able to continue growing our market share in the drivetrain
market. Fuel tank systems are not a material part of our business, but also have continuing relevance for a number of years to come. The
physical assets, human capital and know-how related to fuel tank systems could be repurposed for adjacent product areas such as vehiclehydrogen storage tank systems.

2.2

Markets & Products

The transition to a lower-carbon economy has provided, and is expected to continue to provide, opportunities to enter new product andservice markets. Some recent new products developed to take advantage of opportunities from such transition include:

NEXT GENERATION 800V EDRIVE
Magna’s next generation 800v eDrive solution is a drop-in solution that incorporates several advanced technologies,
resulting in significant reductions in weight and size, enhanced performance, extended driving range and greater
sustainability. The innovation offers enhanced flexibility due to its lightweight (75 kg) design and 20% reduction inheight from Magna’s prior generation eDrive. A key technology and a supplier industry-first advancement is the ability torotate the eDrive 90 degrees around the drive axis, which allows improved system integration in the front and rear vehicle
space. Delivering peak power of 250 kW and a peak axle torque of 5,000 Nm, the system also achieves up to 93%
efficiency in real-world driving (including Worldwide harmonized Light vehicles Test Cycles (WLTC) and highway driving),
which significantly improves efficiency across a wide range of vehicle speeds. The eDrive system requires less aluminumand heavy rare earth materials, resulting in a significant reduction of CO₂ emissions during production by approximately
20% compared to previous generation eDrives.

ETELLIGENT TERRAIN WITH EBEAM™
The EtelligentTerrain is a battery electric 4WD powertrain system designed to maintain full on- and off-road capabilities
with no compromise of payload and towing capabilities. The system is powered by Magna’s steerable eBeam™ Mid at
the front and an eBeam™ High at the rear, with a combined output of 426 kW of peak power. The eBeam™ drops into
the place of traditional beam axles, reusing existing suspension and brake systems, and avoiding the need for expensive
restructuring of existing truck platforms These benefits help automakers simplify the transition toward electrificationof these vehicle segments. Seamless decoupling capability of the front axle means more efficient operation. Magna’s
sophisticated Energy and Motion Control software controls the two eBeams™ which provides off-road specific drive
modes (selectable crawl, auto hill ascent/descent) and torque distribution capabilities (high range, e-selectable low range).
The scalable design is applicable to passenger sport utility, pickup trucks, and light commercial vehicles.

BATTERY ENCLOSURES
Magna has been awarded nine global customer programs for its battery enclosures, including the all‐electric Ford
F‐150 Lightning, GMC Hummer EV, and Chevrolet Silverado EV. The product illustrates our ability to expand structural
product opportunities as electrification grows. The enclosures, which all EVs require, house high‐voltage batteries,
electrical components, sensors, and connectors, contributing to the structural and safety aspects of a vehicle’s frameand protecting critical components from potential impact, heat, and water intrusion. These complex assemblies areavailable in steel, aluminum, and multi-material configurations including lightweight composites.

MODULAR eDECOUPLING UNIT
Magna has started production of a first-to-market, modular eDecoupling unit to support multiple battery electric vehicle
programs for a German premium OEM. A bolt-on, stand-alone solution for BEVs, Magna’s electro-magnetic eDecoupling
is a robust product technology that is integrated as a complete module. The eDecoupling is an electromechanicaldevice that disconnects the e-motor from the driveshaft in EVs when propulsion power is not needed, reducing
energy consumption, and increasing efficiency. It contributes to increased electric driving range of up to nine percent, asignificant benefit for all EVs. This is achieved by reducing drag torque losses of the e-motor and gearbox while its
eDecoupling controls software smoothly operates all shifting sequences. The unit which has an activation time of lessthan 100 milliseconds, features a compact design to minimize added package space and weight in both axial andradial direction.

In addition to Magna’s highlighted product innovations above, we continue to seek out ways to support decarbonization initiatives in theindustry. To this end, Greentown Go Move 2022 a startup-corporate partnerships accelerator program led by Greentown Labs from 20222023 united BASF and Magna with five climatetech startups to drive solutions that decarbonize the automotive industry’s life-cycle impact.
Beyond electrification, transforming the transportation sector necessitates sweeping changes. This Greentown Go program, is focused onmaterial innovations across three critical areas: (i) automotive efficiency (ii) shared and future mobility (iii) recycling processes. The five
participating startups – Carbonova, Endeavor Composites, FibreCoat, Heartland Industries, and MITO Material Solutions – were
meticulously selected from nearly 100 applicants spanning 27 countries. Throughout the accelerator program, the startups collaborated
with BASF and Magna to de-risk their technologies, explore potential industrial applications, and devise go-to-market strategies.

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Annual Information Form

2.3

Resource Efficiency

2.3.1

EnergyOur aggregate global energy spend in 2023 amounted to approximately $537 million broken down by type as follows:◾ Electricity – approximately $432 million◾ Natural Gas – approximately $85 million◾ Other (Propane; Liquid Petrol; Diesel; District Heat; Steam; Coal Gas) – $20 million
As part of our sustainability and operational efficiency efforts, we are focused on optimizing energy use, which may result in savings in overall
energy costs. However, as we continue to forecast growth in Sales and number of facilities over the medium-term, we anticipate that ouraggregate energy consumption may increase. Accordingly, we are focused on becoming more energy efficient (measured by energy
consumption relative to Sales) so that, at minimum, our rate of increase in energy consumption slows.
In connection with our efforts to promote energy efficiency, in 2023 we established one-, two- and five-year energy reduction targets foreach of our Operating Groups, as illustrated below. We achieved our 1 year target in 2023 (completing energy projects that amounted to a
5% reduction of each Operating Group’s 2022 absolute energy usage). We also exceeded our 1-year stretch target aimed at reducing
energy cost intensity by 10% (achieving approximately 11%) in 2023 (compared to 2022). Our remaining 2-year and 5-year energy intensity
reduction targets remain on track.

Achieved

Achieved

On Track

On Track

1 Year

1 Year

2 Year

5 YearComplete energy
reduction projects
in 2023 that equate toat least a 5% reductionof a Group’s 2022 actual
absolute energy usage

A minimum 10%
reduction in energy
intensity(kWh/Production Sales)(Y/E 2024 vs. Y/E 2022)

A minimum 20%
reduction in energy
intensity(kWh/Production Sales)(Y/E 2027 vs. Y/E 2022)

Stretch Target

10% reduction inenergy cost intensity(Cost/Production Sales)(Y/E 2023 vs. Y/E 2022)

Approximately 95% of our Divisions have active energy teams pursuing energy efficiency measures in their respective Divisions (100% whenexcluding our acquisition of the Veoneer Active Safety Business midway through 2023). These teams are supported at the corporate levelby a Global Energy Team which helps identify and promote energy reduction initiatives, including through: training courses designed topromote strategies for reduced energy use; regional benchmarking sessions; regular communication through newsletters; an internal energy
savings collaboration site; and best practice sharing.
Some of the incremental changes made by our Divisions to their facilities and processes to reduce our energy consumption and improveenergy efficiency include:◾

Installation of LED lighting and installation of lighting controls into the building management system (BMS);
Equipment start-up/shut-down/idling procedures to achieve energy-savings during production downtimes;◾ Compressed air leak identification and repair initiatives;◾ Use of ceiling fans to blend air temperatures evenly within our operations;◾ Computer-controlled utility and HVAC systems to allow for improved performance and energy reduction;◾ Installation of energy metering and monitoring systems, a requirement for all our manufacturing facilities;◾ Door and dock seal repairs to reduce heat loss;◾ High efficiency chiller and compressor upgrades;◾ Integration of air economizers and heat recovery units into HVAC systems;◾ Software-managed and occupancy-sensor-controlled lighting and energy efficient lighting retrofits;◾ Use of solar panels at certain facilities;◾ Installation of insulation mattresses on equipment and heating units;◾ Recovery of waste heat from certain high heat processes for use in other areas;◾ Installation of variable frequency drives on motors and pumps; and◾ Participation in energy savings and incentives programs offered by utilities providers in some jurisdictions in which we operate.
◾

In 2023, our Global Energy Team implemented an Energy Transformation Program to further evolve our energy efficiency activities andcontribute to achieving our net-zero commitment. The holistic Program creates a more standardized globa approach that aims to minimize
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consumption, maximize efficiency, and use renewable energy sources to reduce the CO2 footprint through four phases aimed at detailed
investigation of areas for improvement: Identification; Development; Implementation; and Evidence Phase.
Our efforts to reduce energy consumption and operate facilities on a more energy efficient basis forms part of our formal MAFACT
system – the primary operational assessment audit tool used to support our operational excellence. The MAFACT system establishes
standards for achieving operational efficiencies, identifies benchmarks and promotes best practice sharing among Divisions in Magna. The
integration of energy management elements into a core operational assessment tool such as MAFACT is intended to reinforce the importanceof energy management throughout the organization and help realize potential cost savings. In 2023, we implemented over 1400 energy
projects across all of our Operating Groups which resulted in approximately 76,000 tons of CO2 equivalent in annual savings using thelocation-based method and approximately 62,000 tons of CO2 equivalent in annual savings using the market-based method. Given theimportance of energy optimization in meeting our net-zero targets and to further incentivize our Divisions, we have established a separate
approval category for energy efficiency and sustainability-related capital improvements. We have also developed a phased-in renewableenergy strategy focused on Europe and the U.S. first, followed by the other markets in which we operate. In 2023, 22% of our global
electricity purchase was from renewable energy sources evidenced by renewable Energy Attribute Certificates (EACs) or from on-site
generation from photovoltaic (solar panel) or solar thermal systems. 103 of our Divisions currently use renewable electricity, with 75 Divisions
currently using 100% renewable electricity. In the near – and medium-terms, adoption of renewable energy may increase our energy costs,
but we are working to offset the impact of such increases through energy use reductions. While we currently have a few examples ofrenewable energy self-generation at certain facilities, self-generation is not a significant opportunity for us primarily since the vast majority of
our facilities are leased, as well as other factors such as footprint constraints for solar panels at certain owned facilities, and/or facilities inlocations with relatively clean electrical grids that make self-generation economically unfeasible.
2.3.2 Water
We have implemented a 1.5% per year water reduction target, with the aim of reducing water use 15% by 2030, in each case referencing
2019 as the baseline year. To date, we have met this target, having achieved a reduction of 15% at the end of 2023. While we are not asignificant water user, achievement of water reductions would be expected to result in cost savings, potentially by offsetting (in whole or inpart) any increase in the rates charged by applicable water utilities. Overall, we do not anticipate that any savings will be material.
2.3.3

Waste

We have also implemented a zero waste to landfill (“ZWTL”) target. Waste sent to landfill bears both an economic cost borne by Magna, andan environmental cost borne by society as a whole. Although achievement of our ZWTL target will help reduce or eliminate the economic
cost, we do not anticipate any such savings will be material. In 2023 we diverted 96.2% of waste generated away from landfill.

2.4

Resilience

The automotive industry as a whole is investing in innovations aimed at adapting mobility products and service solutions to a lower carbon
economy. The risk mitigation factors below in “Section 3 – Climate-Related Risks and Risk Mitigation” and initiatives to realize opportunities
discussed in this Section of the Sustainability Report, together with factors addressed in “Section 4 – Our Business & Strategy” of our AIF,
are expected to promote our ability to adapt and succeed in a lower carbon economy.

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Annual Information Form

3.

Climate- R el a ted R i sk s a n d R i s k M i t i g at i o n

Magna maintains both top-down and bottom-up processes for identifying and assessing sustainability-related risks within the governancestructure described in “Section 1 – Sustainability Governance” of this Sustainability Report. In order to fully understand the risks set out
below, you should also carefully consider the risk factors set out in “Section 5 – Risk Factors” in our AIF.

3.1

Transition Risks and Risk Mitigation

3.1.1 Regulatory Policy Actions
Applicable near-term policy actions related to climate change generally fall into one of the following categories, each of which may have anindirect effect on Magna:◾

Average Fleet Emissions or Fuel Efficiency Regulations: Governments in key auto producing regions have set challenging
average vehicle fleet emissions or fuel efficiency targets which OEMs must meet, including the European Union (“E.U.”), China, and the
U.S., as detailed below. We regularly monitor changes in regulation relating to emissions and fuel efficiency as part of our strategicplanning processes:
European Union: E.U. regulations generally require OEMs to have achieved E.U. fleet-wide average emissions of 95g CO2/km from2021 through to 2024, which corresponds to 4.1 litres/100 km of gas or 3.6 litres/100 km of diesel. Vehicle manufacturers with anaverage fleet economy in excess of the target must pay an excess emissions penalty for each vehicle registered within the E.U. The
2021 average emissions level forms the baseline for a further 15% fleet-wide average emissions reduction from 2025 onwards; and37.5% from 2030 onwards. In addition, in 2023, the E.U. approved its “Fit for 55” legislation to aggressively increase such targets toa 55% reduction by 2030 and a 100% reduction by 2035 (as discussed below). Penalties levied on non-compliant OEMs may bepassed on to vehicle-buying consumers, which could impact demand for such vehicles and thus demand for Magna products supplied
for such programs. Additionally, E.U. regulations contain incentives aimed at promoting the development of Zero- and low-emission
vehicles (“ZLEVs”). The CO2 emissions targets applying to any particular OEM will be relaxed if its share of ZLEVs registered within the
E.U. in any year exceeds 25% from 2025 to 2029; however, such incentives will be eliminated under the Fit for 55 legislation from 2030
onwards. The Fit for 55 legislation will be integrated into the E.U. member states through domestic legislation.
China: In China, effective July 1, 2021, stringent China VI emissions regulations addressing particulate emissions were implemented,
which could affect consumer demand for vehicles, or powertrain options for vehicles, that do meet the new emissions standard. For
example, in 2019, one of our equity-accounted joint ventures in China experienced a significant drop in demand for one transmission
model supplied to a Chinese OEM. One of the factors underlying the drop in demand was the fact that the transmission would not have
met the China VI standard, had it been in effect at that time. In 2023, a new phase of China’s emission standards was implemented
whereby non-compliant vehicles are no longer allowed to be produced, imported, or sold in China (subject to a 6-month grace periodthat ended December 31, 2023).
United States: In the U.S., the current administration issued an executive order with a non-binding target of 50% of all new vehicles
sold in 2030 to be zero-emission vehicles (“ZEVs”), including battery electric, plug-in hybrid electric, or fuel cell EVs. Subsequently, theEPA finalized new vehicle emissions standards for passenger cars and light-duty trucks with model years 2023-2026 which increasein stringency through that period, and would result in a fleetwide average fuel economy of approximately 40 mpg in 2026. In
March 2024, the EPA issued its new emissions standards that would increase in stringency each year from model year 2027 to modelyear 2032. The new standards would result in an industry-wide average target of:◾ 85 grams/mile of CO2 for light-duty vehicles by 2032, representing a 50% reduction in projected fleet average GHG emissions
compared to 2026 model year standards, and◾ 274 grams/mile of CO2 for medium-duty vehicles by 2032, representing a 44% reduction in projected fleet average GHG emissions
compared to 2026 model year standards.
In addition, the U.S. National Highway Traffic Safety Administration (NHTSA) issued new corporate Average Fuel Economy (CAFE)
standards - regulating how far our vehicles must travel on a gallon of fuel. The new CAFE standards for passenger cars and light trucks
manufactured in model years 2024-2026, would increase fuel efficiency requirements by 8% annually (compared to 1.5% annually
under previous standards) for model years 2024-2026 and increase the estimated fleetwide average fuel economy by 12 miles per
gallon for model year 2026 vehicles, relative to model year 2021. In 2022, the U.S. also announced stricter standards on smog-forming
emissions from trucks, vans and buses starting in the 2027 model year. The new EPA rules are more than 80% stronger than current
rules and represent the first update to clean air standards for heavy-duty vehicles in over 20 years.
The tightening emissions standards in the E.U., China and the U.S. are intended to promote the transition to ZEVs. OEMs have been
spending significant sums in R&D in order to meet the higher regulatory standards. Although production of ZLEVs/ZEVs is accelerating
due to regulatory requirements, to the extent that ZLEVs/ZEVs do not sell at the levels expected, production volumes may need to be
reduced. Lower than forecast production poses a risk to our ability to recover pre-production expenses amortized in the piece-price ofour product, as discussed above.
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◾

Phase-Out of New ICE Vehicles: In addition to more stringent fleet emissions and fuel efficiency standards, the number of nationaland subnational jurisdictions committing to, or accelerating existing commitments to, phase-out of the sale or registration of new ICE
engines is growing. As part of its Fit for 55 legislation, the E.U. will require 100% reduction in CO2 emissions by 2035 effectively
banning the sale of new gasoline and diesel fueled vehicles in E.U. member countries by that date, with an interim reduction of 55% by
2030.
The United Kingdom introduced new regulations (the Zero Emission Vehicle (ZEV) Mandate) in January 2024 requiring 22% of all newcars and vans sold by OEMs in the UK to be zero emission, with the percentage rising to 80% by 2030, and culminating in thecomplete ban on the sale of new ICE vehicles by 2035.
In North America, Canada has accelerated its mandatory phase out of ICE and diesel powered vehicles through a newly adopted
regulation (the Electric Vehicle Availability Standard) that requires all new sales of light-duty vehicles to be ZEVs by 2035; with interim
targets requiring 20% ZEVs from 2026, and at least 60% by 2030. Companies offering vehicles for sale in Canada will be required tooffer a growing percentage of their fleet as ZEVs starting in 2026 and increasing to 100 per cent by 2035.
In the US, the State of California’s, California Air Resources Board (CARB) has adopted the Advanced Clean Cars II regulations. The
regulations ban ICE-powered vehicles in California by 2035, and include progressive targets for ZLEVs in the intervening years. Several
US States and the District of Columbia have existing laws that require state emissions policies to mirror those of California. Currently 17
US states have adopted all or part of California’s low-emissions or zero-emission vehicle regulations. In addition, the following US
states have adopted California’s Advanced Clean Cars II regulations: Colorado; Delaware; Maryland; Massachusetts; New Jersey;
New Mexico; New York; Oregon; Rhode Island; Vermont; Virginia; Washington and the District of Columbia.
Given the long lead times for vehicle development such regulation and proposed regulation are expected to increasingly impact OEM
and automotive supplier product planning and development this decade, and have led to several OEM establishing EV targets for
specific brands or their complete vehicle offerings. Each of our top six customers plan to reach 50% EV production within the next
10 years. EVs accounted for approximately 13% of total of global light vehicle production in 2023, and are projected to reach 43% by2029 based on current IHS Light Vehicle Production Forecasts.

◾

Vehicle Restrictions in Congested Urban Centres: municipal governments in a number of cities around the world have introduced
restrictions on personal-use vehicles in congested urban centres, in an effort to reduce CO2 emissions and improve urban air quality.
Examples of the types of restrictions include: car-free zones; toll charges; and use restrictions by license plate. Continued expansionof such initiatives could reduce the demand for personal-use vehicles, which could affect our profitability. As a result of measurable air
quality improvements in many cities during COVID-19-related mandatory lockdowns/stay-at-home orders, an expansion of restrictions
on personal-use vehicles in urban centres is likely.

We attempt to mitigate applicable policy risks relating to climate change-related regulation in a number of ways, including:◾

monitoring and evaluating global regulatory developments;
early-stage interaction with our OEM customers to understand their product priorities and regulatory compliance requirements;◾ in-house R&D, including our ongoing analysis of megatrends and the “Car of the Future”, combined with investment strategies inmobility and technology start-ups; and◾ strategic planning processes at both Operating Group and Corporate levels, including Board oversight of strategic plans.
◾

In terms of direct policy actions affecting our operations, we anticipate continued strengthening of environmental regulations related toindustrial emissions and discharge of pollutants to air, water and ground. We currently face strict environmental regulations in the countries
where we operate and have developed a global environmental management program in order to comply with or exceed regulatory standards.
Our environmental management program is regularly updated to address changing environmental laws and regulations. Refer to“Section 4.1 – Environmental Stewardship” in this Sustainability Report for a description of the program.
In considering the potential impact of the above or other climate-related policy actions, readers are encouraged to review the following risk
factors in “Section 5 – Risk Factors” in our AIF:
◾

◾

◾

◾

Regional Volume Declines
Deteriorating Vehicle Affordability◾ Consumer Take Rate Shifts◾ Misalignment Between EV
Production and Sales◾ Alignment with the “Car of the Future”◾ Growth of EV-focused OEMs
◾ Risks of Conducting Business with Newer
EV-Focused OEMs

Fisker’s Ability to Continue as a Going Concern
Impairments◾ Changes in Laws
◾ Market Shifts◾ Customer Purchase Orders◾ Customer Pricing Pressure/Contractual Arrangements◾ Environmental ComplianceOver the medium-to long-term, carbon pricing initiatives may present a risk to our profitability. According to the World Bank, in 2023 there
were 73 carbon pricing initiatives implemented or scheduled for implementation in 39 countries and 33 sub-national jurisdictions, which
would cover emissions representing 23% of global GHG emissions.
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Annual Information Form

Currently, certain of our operations are impacted by two emissions trading schemes:◾ E.U. Emissions Trading Scheme (ETS): Our Magna Steyr complete vehicle assembly operations participate in the E.U. Emissions
Trading Scheme which works on the 'cap and trade' principle. A cap is set on the total amount of certain GHG that can be emitted by
the operators covered by the system. The cap is reduced over time so that total emissions fall. Within the cap, operators purchases or
receive emissions allowances, which they can trade with one another as needed. The limit on the total number of allowances available
ensures that they have a value. The price signal incentivizes emission reductions and promotes investment in innovative, low-carbon
technologies, while trading brings flexibility that ensures emissions are cut where it costs least to do so. After each year, an operator
must surrender enough allowances to cover fully its emissions, otherwise heavy fines are imposed. If an installation reduces its
emissions, it can keep the spare allowances to cover its future needs or else sell them to another operator that is short of allowances.
◾ Ontario Emission Performance Standards (EPS) Program: While none of our facilities are currently mandated to join the EPS Program,one of our Exterior Operating Group facilities in Ontario voluntarily joined the Program in 2022 and several other of our Ontario facilities
are in the process of voluntarily opting in. The Province of Ontario Emissions Performance Standards Regulation is used to determine
an emissions limit that industrial facilities must meet each year, with the intent of, among other things, encouraging Ontario’s industrial
sector to reduce greenhouse gas emissions. Facilities registered under the Ontario EPS must quantify and report their GHG emissions
data to the authorities, have such emissions data verified and must comply with their emissions limits. The compliance obligation for a
facility under the Ontario EPS program is the difference between its verified total emissions and its verified total annual emissions limit
imposed by the Ontario EPS program. A facility can satisfy its compliance obligation either by reducing its GHG emissions or submitting
a compliance instrument. The two compliance instruments available are (i) excess emissions units (EEUs) where the facility pays acarbon price per tonne of CO2e for exceeding the annual emissions limit; and (ii) emissions performance units (EPUs), which arecredits earned by a facility for emitting less GHG that its annual emissions limit under the Program. The Program aligns carbon prices
for future years with Canada's federal benchmark, which will result in the price of EEUs to increase annually.
The carbon pricing schemes discussed above have not significantly impacted our profitability to date. We are pursuing energy reduction
measures and developing decarbonization strategies for our manufacturing facilities as detailed in this Sustainability Report. However, overthe medium- to long-term, carbon pricing initiatives could affect our profitability to the extent we are unable to implement cost-saving or
energy reduction measures within a timeframe and/or at a cost which enables us to offset or avoid the cost of carbon pricing initiatives.
3.1.2

Customer-Driven Policy Actions

A number of our OEM customers have set carbon reduction targets and are challenging Tier 1 Suppliers to support such targets. Somesuch OEM targets and expectations are more aggressive than our own decarbonization targets. In some cases, we are being asked toquote the supply of future programs based on 100% renewable energy use for production. Although we expect to meet or exceed ourcustomers’ expectations, the inability to do so within the timeframes expected could result in the loss of some future business.
3.1.3

Climate-Related Litigation

We do not currently believe that climate-change related litigation represents a significant legal risk for us. However, if OEMs are adversely
impacted by climate-change litigation, there is a possibility that Tier 1 Suppliers like Magna could face additional pricing pressure. Readers
are encouraged to review the “Customer Pricing Pressure/Contractual Arrangements” risk factor in “Section 5 – Risk Factors” in our AIF.
3.1.4

Technology

Investments in automotive technologies that support the transition to ZLEVs can be significant, particularly in product areas such as battery
systems for hybrid and EVs. While our product strategy does not currently include battery systems or other components which generate orstore energy for ZLEVs, we have been awarded several battery enclosure programs and currently offer a range of electrified drivetrain
products, hybrid dual-clutch transmissions (“HDTs”), dedicated hybrid transmissions (“DHTs”), as well as complete electric-drive (“e-Drive”)
systems. We have also expanded our product offering into other areas relevant to ZLEVs – for example, in conjunction with a joint venture
partner, we can offer customers a complete EV platform. Our R&D spending for electrification solutions has been significant over the last few
years and is expected to continue to be in coming years as electrification-related technologies continue to evolve. Additionally, our OEM
customers are making significant investments in the development of ZLEVs, which is impacting their profitability and could lead to increased
pricing pressure on us.
As ZLEVs increase their proportion of the overall vehicle market over the medium – to long-term, we expect our sales of manual transmissions
and traditional DCTs to decline, and sales of HDTs, DHTs and e-Drive systems to increase. The increasing adoption of electrified drivetrain
solutions adversely impacts our AWD and 4WD businesses over the long term, since it is possible to achieve AWD through the use ofelectric motors in hybrid or fully-electrified drivetrains. However, OEM product plans show mechanical AWD and 4WD programs extendingout for approximately the next decade. We seek to offset displacement of mechanical AWD and 4WD systems through increased sales ofelectrified product offerings such as e-Drive systems.
Overall, we believe that the range of products we offer our OEM customers provides us with a competitive advantage and an effective hedge
against the market uncertainties associated with the transition to ZLEVs. As illustrated below, a substantial majority of our products are“agnostic” with respect to the type of vehicle propulsion system used, and therefore remain relevant to ZLEVs:
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Included in Magna's portfolio

EV

PowertrainAgnostic

ICE

Power Electronics –EV, HV Hybrid

E-Drivetrain

Interior
Systemsand Seating

Body
Structure

Body Exterior(incl. Lighting
and Mirrors)

Driving
Systems(incl. chassis)

Transmission

Battery Pack

Sensors(ADAS)

Electronics –OtherEngineSystems

ECUs/DCUs

ThermalManagement

Complete
VehicleEngineeringandManufacturing

ExhaustRegulation
Components

In the case of drivetrain products, we view the know-how gained from our mechanical drivetrain expertise as being critical to our ability todeliver innovative electrified solutions that meet our customers’ needs. In addition to continuing to offer a range of mechanical and electrified
drivetrain products, we aim to mitigate technology transition risks through:◾

early-stage interaction with our OEM customers to understand their product priorities and regulatory compliance requirements;
in-house R&D including our ongoing analysis of megatrends and the “Car of the Future”, combined with investment strategies inmobility and technology start-ups; and◾ strategic planning processes at both Operating Group and Corporate levels, including Board oversight of strategic plans.
◾

In considering the potential impact of the above or other climate-related policy actions, readers are encouraged to review the following risk
factors in “Section 5 – Risk Factors” in our AIF:
◾

◾

◾

◾

Intense Competition
Consumer “Take Rate” Shifts◾ Growth of EV-Focused OEMs
◾ Risks of Conducting Business with Newer
EV-Focused OEMs
◾ Fisker’s Ability to Continue as a Going Concern◾ Deteriorating Vehicle Affordability◾ Misalignment Between EV Production andSales◾ Alignment with the “Car of the Future”◾ Customer Purchase Orders◾ Restructuring Costs
3.1.5

Technology and Innovation
Changes in Laws
◾ Market Shifts◾ Dependence on Outsourcing◾ Impairments◾ Customer Pricing Pressure/Contractual Arrangements◾ Investments in Mobility and Technology Companies◾ Intellectual Property

MarketSome of the risks impacting the market for our products in the transition to a lower carbon economy are described above under“Section 3.1.1 – Regulatory Policy Actions” and “Section 3.1.4 – Technology”. Additionally, there are potential risks to the demand for
personal mobility vehicles, and thus for our products, from technology-driven shared mobility solutions such as ride hailing and ride sharing.
To date, such shared mobility solutions have not had a material impact on the demand for new vehicles and no such adverse effect is
expected in the near- to medium-term. In any event, our own strategy related to new mobility seeks to mitigate risks to our business andrealize opportunities based on the breadth of capabilities we can offer new mobility customers.
Additionally, in order to enhance our understanding of potential shifts in consumer behavior, we conduct our own analysis of various factorsthat are expected to drive future personal and shared mobility trends, including through:◾

monitoring and analysis of social, digital, demographic, regulatory, industry, geopolitical and other trends which may create demand
for and drive development of new automotive and mobility technologies;◾ review of academic research;◾ collection and screening of ideas submitted through innovation programs; and◾ early-stage interaction with our OEM customers and new mobility market entrants to understand their product priorities.
We do not currently anticipate long-term supply constraints on key commodities required by us in our business, including steel, aluminumor resin. However, production processes for steel and aluminum are carbon intensive, with relatively scarce supply of low-carbon alternatives.
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Annual Information FormAs the entire industry’s decarbonization and net-zero efforts increase, the price of low-carbon steel and aluminum may increase in the nearand medium-terms until the supply of low-carbon product is sufficient to meet growing demand. In the near- and medium-term, theincreasing production of ZLEVs may also strain supplies of the rare earth minerals and other metals required for vehicle battery systems,
which we do not supply, including nickel, cobalt and lithium used in EV batteries, copper for EV charging infrastructure and rare earth metals
for EV motor magnets. However, such supply constraints could help spur the development of alternative battery technologies or low carbon
fuels and/or promote technological breakthroughs that could facilitate market penetration of hydrogen fuel cell or other technologies. We
intend to continue developing and offering solutions such as e-Drive systems which are neutral as to electric power source (battery orhydrogen fuel cell stack) in order to mitigate potential risks related to supply constraints of rare earth minerals or other commodities needed
for current ZLEV power source technologies.
In considering the potential impact of market risks, readers are encouraged to review the following risk factors in “Section 5 – Risk Factors”
in our AIF:
◾

◾

◾

◾

Intense Competition
Consumer “Take Rate” Shifts◾ Deteriorating Vehicle Affordability◾ Misalignment Between EV
Production and Sales◾ Alignment with the “Car of the Future”◾ Growth of EV-Focused OEMs
◾ Risks of Conducting Business with Newer
EV-Focused OEMs
◾ Fisker’s Ability to Continue as a Going Concern◾ Supply Chain Disruptions
3.1.6

Quote/Pricing Assumptions
Commodity Price Volatility◾ Technology and Innovation◾ Market Shifts◾ Dependence on Outsourcing◾ Customer Pricing Pressure/Contractual Arrangements◾ Investments in Mobility and Technology Companies

Reputation

Since light vehicles are contributors to global GHG emissions, Tier 1 suppliers like Magna may face reputational risks from participation in
the automotive industry. Examples of such risk types include potential loss of business from sustainability-focused customers, reduced
investor demand for our shares, and challenges attracting talent. A number of our OEM customers are embedding sustainability criteria intheir sourcing decisions and could reduce purchases from us if they perceive Magna to lag other suppliers with respect to sustainability.
Stakeholders, including investors and employees, as well as prospective employees are increasingly focused on companies’ sustainability
efforts. Investors may sell shares of investee companies perceived to be less sustainable. In addition, millennial and other components of
the workforce want to work in companies they perceive as sustainable, making it difficult for companies to attract such talent if the company
is perceived as lagging in sustainability. However, OEMs and Tier 1 Suppliers have been proactively adapting to climate change andtransitioning to a lower carbon economy, as evidenced by the significant spending on R&D and technological innovation to reduce CO2
emissions, particularly through electrification and powertrain efficiency, as well as the setting of decarbonization targets in their own
operations. At the same time, particular OEMs may be viewed as more or less sustainable based on their sustainability strategies andcommitment to transitioning to a lower-carbon economy. Equally, particular vehicle models or even entire vehicle segments may be perceived
to be more or less sustainable. As a supplier of a broad range of systems to all major OEMs, we do not anticipate any consequences to our
reputation by virtue of the fact that we may supply to any particular OEM, vehicle or vehicle segment. In any event, we believe that our R&D
and technological innovation, which is focused on lightweighting, improved fuel economy and lower emissions, together with oursustainability strategy, including our net-zero commitments, serve to mitigate potential reputational risks.

3.2

Physical Risks and Risk Mitigation

3.2.1

Acute

With the increased frequency and severity of extreme weather events associated with Climate change, including floods, windstorms,
wildfires, tornados, tsunamis, hailstorms and other natural weather hazards, we face the risk that such an event could cause significant
damage to one or more of our facilities or those of our customers and/or sub-suppliers. While our primary concern in an acute climate event
affecting one of our facilities would be the safety and well-being of our employees, property damage and business interruption would
represent the primary financial risk.
An acute climate event that significantly damages one of our facilities, could disrupt our production and/or prevent us from supplying
products to our customers. Such an event could lead to us incurring a number of costs, many of which may be unrecoverable, including:costs related to the physical repair of any damage to our facility; costs related to premium freight or re-sourcing of supply; penalties orbusiness interruption claims by our customers; loss of future business and reputational damage; and higher insurance costs going forward.
Extreme climate events could also disrupt supply chains for the entire industry over the near-, medium- and long-term. The National Centers
for Environmental Information, a U.S. federal agency, estimates that the number of billion-dollar weather and climate disasters in the UnitedStates has risen significantly to an annual average of over 20 in the last five years, from an annual average of three per year in the 1980s. In
recent years, a number of supply disruptions resulting from extreme weather have occurred around the world, including:
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◾

a rare and extreme storm impacted the U.S. state of Texas that disrupted oil production and thus supplies of resins and materials
required for automotive seating. The storm also forced three major semiconductor facilities clustered in the Austin, Texas area totemporarily shut down, which exacerbated the global semiconductor shortage.
◾ flooding in central China that disrupted supply chains for commodities and forced the closure of several automotive OEM plants.
◾ a typhoon in Malaysia that damaged Southeast Asia’s second-largest port, causing a disruption in the semiconductor supply chain
and causing some U.S.-based automotive OEMs to temporarily suspend operations.
◾ the Rhine river, Europe’s most important commercial waterway, experienced both bursting from heavy rainfall and snowmelt, as wellas, low water levels from drought conditions. The conditions halted shipping for extended periods, forced reduced cargo loads, anddisrupted both inbound raw material and outbound product deliveries, which impacted the German automotive industry, in particular.
Such events can cause shortages of critical materials, which in turn drives prices higher. Efforts to mitigate the impact of such events often
result in higher near-term costs until disruption of the affected material has been resolved, due to factors such as premium freight costs for
substitute materials. As the frequency of such events increases, we may be forced to maintain higher inventories of various materials andcomponents required for production, to minimize potential disruptions.
We maintain a global property risk control (PRC) program to support our efforts to mitigate risks to our employees’ safety, physical property
risks and potential for business interruption due to extreme weather events. The program, which includes risk engineering with support froma third party property risk engineering consulting firm, includes the following elements to promote the physical resiliency of our facilities andminimize the risk of disruption to our operations: pre-screening of facility site selection; acquisition risk assessments; periodic facility
inspections; facility construction design review and recommendations; and training and education. Our third party risk engineering consultant
typically engages in over 200 physical on-site assessments annually to evaluate various risks, including those relating to natural hazards andalso conducts targeted analysis of areas of concern. Using the Swiss Re NatCat database, the advisor has analyzed over 400 unique
Magna locations to assess climate related exposures, including: flood, wind, storm surge, wildfire, tornado. tsunami, hailstorm, lightning,temperature change, precipitation, sea level rise risk and water security. The results of the analysis form the basis of discussions with our
PRC group regarding potential risk control recommendations to be implemented in our facilities.
In certain circumstances, the program extends the risk assessment to our direct suppliers by identifying and evaluating potential exposures
to our direct supply chain (including natural hazards) which could potentially disrupt business operations. To augment our monitoring
capabilities, we use a third party software platform that, among other things, includes live monitoring of supply chain risks, including weather
events such as drought, floods, earthquakes, landslides, and tropical storms. Where such supply chain exposures are identified, a moredetailed assessment may be performed to better understand the supply chain risk, including further on-site assessment, where practicable.
In considering the potential impact of acute physical risks, readers are encouraged to review the following risk factors in “Section 5 – Risk
Factors” in our AIF:
◾

◾

◾

◾

Supply Chain Disruptions
Semiconductor chip supply
disruptions and price increases◾ Regional Energy Supply and Pricing

Legal and Regulatory Proceedings
Climate Change Risks – Transition and Physical Risks

An extreme weather event that damages any of our manufacturing Divisions and results in injuries or fatalities among employees at such
Division could have a material adverse effect on our reputation and could result in legal claims being brought against us.
Climate change considerations may impact the availability of and premiums for insurance coverage in general, and in particular, for properties
in high-risk locations. Additionally, we may need to self-insure a higher level of risk, which could result in a material adverse effect on
profitability in the event of an extreme weather event which causes damage to one or more of our facilities.
3.2.2

Chronic

As part of our PRC program, we have retained an advisor to map our global footprint against identified earthquake, wind exposed/
hurricane, flood exposed and wildfire zones, as well as areas with low water security, in order to assist us with footprint planning, as well as
our understanding of, and efforts to address, potential risks associated with such types of natural catastrophes. This footprint mapping
exercise provided the following conclusions:◾

Property Risk Concentrations: There are ten geographic regions (in Austria, Canada, Germany, Mexico and the U.S.) in which wehave concentrations of property/asset risk, meaning multiple locations within a 35 km radius, and comprising approximately 46% of
the total insured value (“TIV”) under our property risk program. All of the regions of concentrated property/asset value are considered
to be “Low” seismic hazard zones and are not exposed to tropical cyclones.
◾ Seismic Zones: We have operations in Austria, Germany, Slovenia, Slovak Republic, Morocco, Portugal, India, Turkey, Japan, Italy,
Romania, North Macedonia, China, the U.S., and Mexico comprising approximately 19% of the TIV under our property risk program,which are located in regions of “Moderately High” or greater seismic hazard. None of our operations are in regions where the seismic
hazard is considered “Very High” or “Extreme”.
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Annual Information Form◾

Tropical Cyclone Zones: Operations in certain parts of Mexico, Japan, China, India, and the U.S. comprising approximately 4% of
the TIV under our property risk program are located in hurricane risk Zone 1 to Zone 5, as per Munich Re’s Natural Hazards Assessment
Network (NATHAN) categorization, with three locations in Mexico and three in China falling in Zone 3. TIV by Tropical Cyclone Zones
are as follows:
Munich Re (NATHAN) Tropical Cyclone Zone

Proportion of TIV

Zone 5: > 300 km/h◾

NIL

Zone 4: 252-300 km/h

NIL

Zone 3: 213-251 km/h

0.6%

Zone 2: 185-212 km/h

0.4%

Zone 1: 142-184 km/h

3.2%

Zone 0: 76-141 km/h

24.2%

No hazard: < 76 km/h

71.6%

Flood Zones: Flood risk is typically categorized as 50-year, 100-year, 200-year and 500-year flood risks. Definitions of these categories
based on Swiss Re’s CatNet Global Flood Zone (GFZ) categorization showing the number of our locations and the proportion by TIV
for each category are as follows:

Category

Flood Probability

Number of
Locations

Proportion of TIV
within 5 km Radius

50 year1 in 50 (2%) chance of occurring ina year22

1.5%

100 year

1 in 100 (1%) chance of occurring ina year68

10.8%

200 year

1 in 200 (0.5%) chance of occurringin a year

103

12.1%

500 year

1 in 500 (0.2%) chance of occurringin a year

36

2.7%

OutsideOutside recognized flood zones

522

73.0%

Climate change is associated with a rise in sea levels, which places properties located within a five kilometre radius of the current coastline
at greater risk of coastal flooding. A total of 13 of our Divisions are located five kilometres or closer to a coastline and thus may be at higher
risk from the effects of climate-change related sea rise:
No. of Divisions

Location(s)Body of Water

2

Michigan, U.S.

Lake Michigan

1Ohio, U.S.

Lake Erie

1

California, U.S.

San Pedro Creek

1

Ontario, Canada

Lake Ontario

1

Liverpool, U.K.

River Mersey

1Bari, Italy

Adriatic Sea

1

Kocaeli, Turkey

Lake Sapanca

1

Tangier, Morocco

Atlantic Ocean

1

Santa Catarina, Brazil

Rio Piral1

Hangzhou, China

East China Sea

1

Taizhou, China

East China Sea

1

Kanagawa, Japan

Onda River

Two of such Divisions (Kocaeli, Turkey and Taizhou, China) representing less than 0.5% of TIV are located within one kilometre of a coastline.
◾

Wildfires: One of our Divisions located in Brazil, representing less than ≤1% of TIV, is considered as being exposed to significant
wildfire risk. All other wildfire risk is considered moderate to negligible. Wildfire risk is reviewed based on proximity to forests andgrasslands with consideration of topography and climate conditions.

◾

Water Security: Water scarcity is a chronic condition in a number of regions of the world, and it is expected to be amplified due to theeffects of climate change.
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As part of our PRM program we conducted an assessment of water security risk in 2022. Water security suggests the reliability/security ofan acceptable quantity and quality of water, since water is a critical input in many production processes as well as the lifeblood of sprinkler
protection systems. A reduction or failure of water supply could cause a significant impact on operations in the affected region. The
methodology for determining water security exposure was based on the "Baseline Water Stress" 4 of the World Resources Institute (WRI)
Aqueduct Global Maps 3.0, that measures the ratio of water withdrawals to available renewable surface and groundwater at the catchment
scale. Water withdrawals include domestic, industrial, irrigation, and livestock consumptive and non-consumptive uses. Available renewable
water supplies include the impact of upstream consumptive water users and large dams on downstream water availability. The indicatorused is calculated by inverting the "Baseline Water Stress" scores and converted to a 0-100 scale to represent "Water Availability" as apercentage. Low values represent water stressed areas, due to either high water withdrawals or low water supplies.
Our assessment showed 61 locations in regions deemed to have "low" water security, comprising approximately 14% of 2022 TIV at thetime. The assessment indicated exposure locations in China, Germany, India, Italy, Mexico, Spain and the United States. However, Mexico
represented the most significant region for us in terms of exposure to water security risks as approximately 50% of the affected locations
were in Mexico. While we currently attempt to mitigate the impact of water scarcity risks through water reduction and re-use activities,
including the use of treated waste water for irrigation of green areas on a site, the water security analysis is used for additional discussions
with our risk engineering consultant, including potential additional recommendations for action plans to mitigate water security risks in theaffected regions.
In considering the potential impact of chronic physical risks, readers are encouraged to review the following risk factors in “Section 5 – Risk
Factors” in our AIF:◾

Supply Chain Disruptions◾

Climate Change Risks – Transition and Physical Risks◾

Regional Energy Shortages and Pricing

4 . Non- Clima te E l emen ts of Su s t ai n ab i l i t y
4.1

Environmental Stewardship

270+
FACILITIES ISO 14001
CERTIFIED

Magna strives to be an industry leader in health, safety and environmental practices in all
operations through technological innovation and process efficiencies to minimize the impact of
our operations on the environment and to provide safe and healthful working conditions. In
furtherance of this objective, Magna’s Health, Safety and Environmental Policy (“HSE Policy”)
commits Magna to, among other things:◾

complying with, and exceeding where reasonably possible, all applicable health, safety
and environmental laws and regulations and conforming with our internal standards basedon generally accepted environmental practices and industry codes of practice;◾ regularly evaluating and monitoring past and present business activities impacting on
health, safety and environmental matters;◾ improving the efficient use of natural resources, including energy and water;◾ minimizing waste streams and emissions, including CO2e;
FACILITIES ISO 50001◾ implementing environmental sustainability targets as defined in the Magna Environmental
CERTIFIED
Principles;◾ utilizing innovative design and engineering to reduce the environmental impact of our
products during vehicle operation and at end of life;◾ ensuring that a systematic review program is implemented and monitored at all times for each of our operations, with a goal ofcontinuous improvement in health, safety and environmental matters and zero accidents or environmental incidents; and◾ reporting to the Board at least annually.

25+

The full text of the HSE Policy is located on Magna’s website (www.magna.com).

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Annual Information Form

4.1.1

Environmental Compliance

Magna is subject to a wide range of environmental laws and regulations relating to emissions, soil and ground water quality, wastewater
discharge, waste management and storage of hazardous substances. Magna maintains a global environmental program which consists ofboth internal and third party audits and inspections of our facilities for compliance with local regulations, internal corporate environmental
requirements and industry best practices as detailed below:
Audits &Inspections

Risk Assessment &Action Plan
Each finding identified in an audit orinspection is assigned a risk score,with the risk scores of all findings
combined to establish an overall
environmental performance rating forthe Division
The Division is provided a reportcontaining recommendations which
are prioritized based on the level ofrisk identified in the risk assessment
The Division is required to develop a
corrective action plan to address theidentified risk

Oversight,
Performance Tracking & Reporting
Magna’s Environmental Department
provides ongoing assistance toDivision personnel in resolving action
plan items, including by reviewing
and approving action plans that havebeen submitted to close-out
identified risks
Audit/Inspection findings are also
communicated to our OperatingGroup management to enhanceoversight and commitment toresolving action items
A performance review takes placequarterly with Operating Groupmanagement
An escalation process is in place todeal with findings that are not being
resolved on a timely basis, withadditional environmental risk
awareness training provided to therelevant Division, where necessary
Magna’s Environmental Department
provides periodic environmental
compliance updates to the GNSC

General environmental awareness training is provided to employees by Division management as well as Magna’s Environmental Department
as part of ISO 14001 certification compliance. In addition, Magna’s Environmental Department holds regular conferences for representativesof our manufacturing facilities in order to:◾ reinforce Magna’s commitment to environmental responsibility;◾ communicate changes in local and regional regulations; and◾ share best practices with respect to environmental protection, compliance and sustainability initiatives.
4.1.2

Hazardous Waste and Industrial Emissions

We operate a number of manufacturing facilities that use environmentally-sensitive processes and hazardous materials. We believe that allof these operations meet, in all material respects, applicable governmental standards for management of hazardous waste and industrial
emissions. Occasionally our operations may receive a notice of violation or similar communication from local regulators during routine
reviews. We have in the past and will continue in the future to address any such notices promptly. Based on our preliminary data,approximately 4% of the aggregate waste generated by Magna in 2023 was hazardous, similar to 2022. We attempt to reduce the amountof hazardous waste that ends up in secure landfills through: recycling, reuse or energy recovery initiatives. Approximately 91% of thehazardous waste generated by Magna in 2023 was diverted from secure landfills through such initiatives.

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4.2

Fairness and Concern for Employees
4.2.1

Our Commitment to Magna Employees

We are committed to an operating philosophy based on fairness and concern for people. This philosophy is
one in which employees and management share in the responsibility of ensuring our company’s success.
Our Employee’s Charter, a foundational document in our business, sets out this philosophy through thefollowing principles:◾

Job Security – Being competitive by making a better product for a better price is the best way toenhance job security. Magna is committed to working together with employees to help protect their job
security. To assist employees Magna will provide job counselling and training, as well as employee andfamily assistance programs.
◾ A Safe & Healthful Workplace – Magna is committed to providing employees with a working
environment which is safe and healthful.
◾ Fair Treatment – Magna offers equal opportunities based on an individual’s qualifications andperformance, free from discrimination or favouritism.
◾ Competitive Wages & Benefits – Magna provides employees with information which enables them tocompare their total compensation, including wages and benefits, with those earned by employees of
their direct competitors and local companies their Division competes with for people. If totalcompensation is found not to be competitive, it will be adjusted.
◾ Employee Equity & Profit Participation – Magna believes that every employee should share in thefinancial success of the company.
◾ Communication & Information – Through regular monthly meetings between management andemployees, continuous improvement meetings and through various publications and videos, we keep
our employees informed about company and industry developments. We also conduct regular
employee opinion surveys to help facilitate employee engagement and to receive valuable feedback
from employees to help drive continuous improvement.
◾ The Hotline – Should an employee have a problem, or feel the above principles are not being met, we
encourage them to contact the Hotline to register their complaint(s). Those using the Hotline do nothave to give their name, but if they choose to do so, it will be held in strict confidence. Hotline
Investigators will respond to those using the Hotline. The Hotline is committed to investigating andresolving all concerns or complaints and must report the outcome to Magna’s Global Human
Resources Department. We also maintain a confidential and anonymous whistle-blower hotline for
employees and other stakeholders that is overseen by our Audit Committee. See Section 4.5 –“Corporate Ethics and Compliance” below for further details.
We also maintain a Global Labour Standards Policy, which codifies our existing practices consistent with our
Fair Enterprise culture. This Policy provides a framework for our commitment to fundamental human rights
and international standards that help support positive employee relations, including:◾

AUSTRIA, CANADA & MEXICO

promoting the importance of diversity, inclusion, and respect for one another, regardless of personal
differences;◾ not tolerating harassment of any kind, including physical, sexual, psychological or verbal abuse;◾ ensuring employees do not face discrimination in accordance with the protections afforded by◾ applicable law, including discrimination based on race, nationality or social origin, colour, sex, religion,
gender identity, disability or sexual orientation;◾ condemning child labour;◾ rejecting forced or compulsory labour;◾ maintaining safe and healthy workplaces; and◾ providing employees with appropriate rest and leisure time.

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We publish a Slavery and Human Trafficking Statement setting out the steps Magna has taken to address
the risk of slavery and human trafficking in our operations and supply chain. The statement can be found in
the “Financial Reports & Public Filings” section of our website, at www.magna.com.
Our commitment to our employees continued to garner recognition, including:
◾
◾
◾
◾
◾
◾
◾
◾
◾
◾
◾

Forbes: World’s Best Employers (2023) – Our 7th consecutive year receiving this accolade
Forbes: America’s Best Large Employers (2023)
Forbes: Canada’s Best Employers (2023 and 2024)
Fortune: World’s Most Admired Companies (2023 & 2024)
Built in: Best Places to Work (2023 and 2024)“Open Company” Certification from Glassdoor
Great Place to Work® – Turkey (2022 – 2023)
Mercier China: Healthiest Workplace Awards (2022-2023)
Zhaopin: China Best Employer Award (2023)
Universum: Most Attractive Employer Award – Austria, Canada & Maxico (2023)
51job: 100 Excellence Employer of China of 2023; Excellence in Women’s Leadership Development(2023)

Annual Information Form

4.2.2

Collective Rights

We are committed to providing workplace environments that promote the dignified, ethical, and respectful treatment of our employees, as
reflected in the standards contained in our Global Labour Standards Policy and our Code of Conduct and Ethics (“Code”).
Our Global Labour Standards Policy articulates our respect for employees’ right to associate freely and to choose for themselves whether
or not they wish to be represented by a third party in accordance with local laws. We operate both unionized and non-unionized facilities
across multiple regions, as well as having facilities where other forms of representative structures exist, such as works councils, and/or
where industry-wide tariff agreements apply. In our core regions such as the Americas, Europe and Asia, we have a number of locations
formally represented by trade unions, where local collective bargaining agreements are in place. Where such arrangements exist, we strive
to maintain positive and productive business relationships with these organizations, resulting in competitive industry agreements.
Employees in our unrepresented facilities benefit from a system of progressive and people-focused human resources policies, coupled with
consultative concern resolution programs which include our Fairness Committee, Employee Advocates, Employee Opinion Survey, OpenDoor Process and our Hotline, all designed to proactively address individual and workplace issues in a constructive and respectful manner.
4.2.3

Magna’s Open-Door Process

Magna maintains a comprehensive Open-Door Process, whereby employees are empowered to bring issues and concerns forward toleadership at all levels of the organization, without fear of retaliation. This process enables management and employees to collaborate on
resolving workplace issues together. This process includes regular use of Employee Opinion Surveys, focus groups, and local continuous
improvement action plans, focused on maintaining a positive workplace environment.
As a part of our Open-Door Process, we maintain Fairness Committees in many of our North American and European manufacturing
facilities, as well as at various manufacturing facilities in India and China. These Fairness Committees enable employees to have many of
their concerns resolved by a peer review committee comprised of both management and fellow employees. Most of our North American
manufacturing facilities also have an Employee Advocate who works with our employees and management to help ensure that any concernsthat arise in the workplace are addressed quickly and in accordance with our Employee’s Charter, Global Labour Standards Policy andOperational Principles.
4.2.4

Leadership Development / Talent Management

We have implemented, and continue to enhance, our Leadership Development System to help identify, train and develop future leaders withthe skills and expertise needed to manage a complex, global business. We have also based our talent management strategy on our current
business objectives and strategy and our understanding of the transformation taking place in the automotive industry. Given that aneffective workforce will increasingly be required to be lean and digitally adept, we are focused on building such a workforce through attraction
and recruitment, professional development, succession planning, promoting diversity and inclusion and preservation of our Fair Enterprise
culture.
4.2.5

Employee Training

To support our talent management programs and employee career development we provide numerous learning opportunities to ouremployees. These include:◾ Required training for designated employees, including:◾ Global Compliance, Legal and Ethics training (discussed in section 4.5 of this Sustainability Report), including with respect to our
Code and supplementary policies;◾ Information Security/Cybersecurity and data classification;◾ Sustainability objectives and priorities, including gender equality, industry innovation and infrastructure, safety, good health andwell-being, which has been completed by almost 50,000 employees to date;◾ Continuous learning opportunities supported by a global team, with localized resources in our major footprint locations in the following
areas for employees on the shop floor to senior management:◾ Manufacturing operations, technical skills, and apprenticeships;◾ Business and functional knowledge and skills;◾ Interpersonal skills, mentoring , and coaching
Magna’s Leadership Development Framework is built on best practices in the business and manufacturing environment that includes
multiple levels of incumbent programs. All new employees are required to receive compliance on-boarding training on Code and related
topics as part of their on-boarding process when joining the company. Finally, all new people managers receive advanced ethics training;
and all customer facing employees receive advanced anti-trust training upon hiring.
In order to support our talent management programs and employee career development, we provide numerous training resources andopportunities for our employees. These include:◾ required training for designated employees with regard to global compliance topics (discussed in Section 4.5 of this Sustainability
Report), including our Code and supplementary policies;
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◾

required training for designated employees with respect to various topics, including: information security/cybersecurity and dataclassification;◾ training with regard to sustainability objectives and priorities, including gender equality, industry innovation and infrastructure, andgood health and well-being, which has been completed by approximately 33,000 of our employees to date;◾ providing a Leadership Excellence Program (LE), built on best practices in the business and manufacturing environment;◾ online Magna Training Centres (MTCs) for Canada/USA, Mexico, Austria, Germany, Czech Republic, Slovakia, Poland, China andIndia. The MTCs offer programs to develop technical, leadership and business skills to support the learning and development needs of
Magna employees from the shop floor to senior management; and◾ maintaining an online Learning Hub to provide employees with the ability to enhance and future proof their technical and other skills.
Approximately 25% of our total workforce (i.e. all of our white collar employees) receives e-learning training each year, consisting of one
course on the Code (including the topics of bribery, corruption, antitrust, and competition) and a second course on one ethics-related topic
selected for that year. All new employees are required to receive compliance on-boarding training on Code and related topics as part of theiron-boarding process when joining the company. Finally, all new people managers receive advanced ethics training; and all customer-facing
employees receive advanced antitrust training upon hiring.

4.3

Diversity and Inclusion in our Workplaces

Magna is committed to attracting, retaining and developing under-represented talent across the globe. In order to pursue this commitment,
Magna’s identified strategic pillars for Diversity and Inclusion (“D&I”) success are reviewed by our Executive Management with the Chairs of
our Diversity and Inclusion Council. Periodic updates are provided to the Board of Directors about how the company is progressing the D&I
strategy. Our key D&I priorities are to create expand inclusion programs; cultivate an inclusive culture; and to further strategic partnerships,
as discussed below:
4.3.1

Expanding Inclusion Programs

Our employees are critical stakeholders in our business. The principle of Fair Treatment, outlined in our Employee’s Charter – one which we
reinforce through employee meetings, training and communications – has been a key element in fostering an inclusive workplace at Magna.
Any employee who feels that we are not living up to the principles of the Charter can seek redress through the Magna Hotline.
We seek to abide by all applicable labour and employment laws, including those prohibiting discrimination and harassment and those
providing for the reasonable accommodation of differences. We are committed to providing equal employment and career advancement
opportunities, without discrimination based on sex, race, ethnic background, religion, disability or any other personal characteristic protectedby law. This is addressed in our Code documentation and training, which all Magna employees must complete. Building on the foundationof awareness, education, and constructive dialogue established at Magna, we are prioritizing the expansion of inclusion programs to
support our employees along additional dimensions of diversity.
4.3.2

Cultivating an Inclusive Culture

Our Executive Management continues to reinforce the importance of an inclusive and diverse organization. We continue to roll out facilitatedworkshops to all leadership levels to better equip leaders with tools and resources to drive inclusive behaviour. We also host “listening
sessions” to understand racial barriers and issues faced by diverse employees. We promote and embed diversity through our talentattraction and management processes. We have provided diversity and inclusion training for certain employees and have made various D&I
tools and resources available for all employees. To further advance our D&I progress, we have implemented three employee-led, volunteer
resource communities: Race & Ethnicity (EDGE); LGBQT+ and Allies (PRIDE); and the Women’s eXchange. These communities support theexecution of Magna’s D&I strategy, raise awareness and help foster a more inclusive environment. The employee resource communities
provide, among other things, opportunities for mentoring and career development. Our objective is to be an organization that enables every
employee to reach their full potential. We are prioritizing ensuring consistent outcomes and experiences for our employees.
4.3.3

Strengthening Strategic Partnerships

We continue to enhance our capabilities by working with diversity and inclusion thought leaders, associations and non-profit organizations
dedicated to the advancement of women, racial minorities, and employees of diverse backgrounds; promotion of inclusive work cultures; aswell as strategies and actions to address the needs of a diverse workforce. These partnerships help us to benchmark our activities andprogress, as well as provide insight into best practices and emerging topics for our D&I agenda. Recognizing the importance of improving
gender diversity within key technical career streams and to support the development of the next generation of the talent in science,technology, engineering, and mathematics (STEM), we have formed strategic partnerships with a number of organizations that promote
gender diversity in technical career streams. Our current strategic partnerships include: Automotive Women’s Alliance; Build a Dream;
Centre for Automotive Diversity, Inclusion & Advancement (CADIA); Catalyst; FIRST Robotics – Girls in STEM; her Career; Institute ofElectrical and Electronic Engineers (IEEE); Indspire; Inforum; KnowledgeStart; National Society of Black Engineers (NSBE); Queen’s University
Engineering Society; Society of Hispanic Professional Engineers; Society of Women Engineers (SWE); WISE (Women in Science and
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Annual Information Form

Engineering); and Women in Manufacturing. We also participate in various automotive advisory groups to ensure the focus on Diversity andInclusion in the industry remains strong. We are leveraging the experience of organizations focused on inclusion to ensure Magna continues
to be positioned as an employer of choice and to enhance our partnership criteria to embed diversity and inclusion into evaluations,selections, and agreements.
4.3.4

Gender Diversity

We are continuing to progress our agenda to increase the number of women in Magna. On a global basis, approximately 28% of theemployees in our wholly owned operations are women. A total of approximately 4,958 employees in our wholly owned operations occupy
critical roles with 885 of such employees, or 18%, being women. Both the percentage of women in our wholly owned operations, and thepercentage of women in critical roles increased slightly from the previous year. Underrepresentation of women in our workforce is mostpronounced in IT, operations, and product engineering career streams, which is a consistent trend throughout the automotive industry. We
recognize that there are improvements to be made and we are pursuing strategies to accelerate the progression of women, in director andmanagerial level roles, and in our most critical operational and technical roles, where there is the greatest level of underrepresentation.
As part of our succession planning program we continue to identify high-potential, diverse talent candidates and implement accelerated
development plans to support their progression to advanced roles. During talent and succession discussions, there is an increased level offocus on the number of women and diverse candidates nominated into each of our succession pools.
In addition, the Board as a whole continues to advocate for improved gender representation and other diversity in leadership and othercritical roles, as well as STEM career streams. In addition to their strong advocacy, the female directors of the Board, currently representing
38% of our Board of Directors, have also sought opportunities to mentor and share their experiences with the company’s high-performing
female employees. Recognizing the important example set by the Board with respect to its own composition, the Board adopted a Board
Diversity Policy (located in the Board Charter) targeting gender parity by December 31, 2023, subject to a minimum of not less than 30%
female director prior to that time, and successfully achieved this target. Consistent with the recommendations of the Canadian Coalition for
Good Governance, gender parity will be achieved if the balance between male and female directors ranges between 40% and 60% over arolling three-year time frame. As of May 9, 2024, the percentage of women on the Board will be 42%, assuming election of all nominees for
Magna’s annual meeting of shareholders. In addition to the Board gender representation discussed above, 42% of nominees for election at
Magna’s annual meeting of shareholders are diverse nominees (based on LGBTQ+ or being an underrepresented minority in their homecountry).

4.4

Occupational Health and Safety

4.4.1

Health and Safety Standards and Compliance

Our health and safety program at our Divisions must include specific areas of risk assessment and evaluation that at a minimum includes:
machinery and equipment safety; incident and accident management; personal protective equipment; emergency preparedness policies
and action plans; fire protection; ergonomics; mental health/stress; industrial hygiene and handling of chemical/biological substances; andworking at heights and confined space.
Our commitment to providing a safe and healthful work environment is fulfilled through a regular program of health and safety audits andinspections of our global facilities. These audits and inspections cover the specific minimum topics listed above. Audits are designed toaddress documentation requirements, while inspections assess physical hazards. Audits and inspections are conducted on-site andfollowed with a report requiring the facility to develop an action plan to address deficiencies or best practices. The action plans are reviewed
quarterly by senior Operating Group management.
The compliance program incorporates international and regional standards, including: ISO 45001, Canadian Standards Association (CSA),
American National Standards Institute (ANSI), Conformité Européenne (CE), as well as country-specific standards. Audits and inspections
are conducted by specialists with knowledge of Magna’s standards and country-specific requirements. Legislative changes, accident

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trends and changes to industry standards are incorporated into the program as part of the annual review of the program and updates ofaudit requirements are conducted every three years. The key elements of the program are detailed below:
Audits &Inspections

Risk Assessment &Action Plan
Each action item identified in an audit
or inspection is assigned a risk score,with the risk scores of all action items
combined to establish an overall
health and safety performance rating
for the Division
The Division is provided a reportcontaining recommendations which
are prioritized based on the level ofrisk identified in the risk assessment
The Division is required to develop a
corrective action plan to address theidentified risk

Oversight,
Performance Tracking & Reporting
Magna’s Health and Safety
Department provides ongoing
assistance to Division personnel inresolving action plan items and also
reviewing action items that havebeen submitted for closure from
DivisionsAudit/Inspection findings are also
communicated to our OperatingGroup management to enhanceoversight and commitment toresolving action items
A performance review takes placequarterly with Operating Groupmanagement
An escalation process is in place todeal with action items that are notbeing resolved on a timely basis, withadditional health and safety risk
awareness training provided to therelevant Division, where necessary
Magna’s Health and Safety
Department provides periodic healthand safety compliance updates to
the TOCC

Our Health and Safety Department holds regular conferences with representatives of our Divisions to reinforce our commitment to providing
a safe and healthful work environment, as well as to share best practices with respect to occupational health and safety. An employee who
believes we have not fulfilled our promise to provide a safe and healthful working environment can seek redress through the Magna Hotline.
4.4.2

Ergonomics Program

Magna is committed to minimizing and eliminating ergonomics risk factors. A key program for supporting employee well-being is ourergonomics program which aims to reduce the risk of musculoskeletal injuries. Managed by each Division’s ergonomic committee and withthe support and guidance of corporate ergonomists, the program regularly evaluates Division ergonomics against a set of establishedcriteria.

4.5

Corporate Ethics and Compliance

4.5.1

Code of Conduct and Ethics

We are committed to conducting business in a legal and ethical manner globally. Our Code, which applies equally to all our directors,
executive officers and employees, articulates our compliance-oriented values and expectations. The principles of the Code have been andcontinue to be reinforced by our Chief Executive Officer, Executive Management, Operating Group management and the Board.
The Code addresses standards of conduct in a number of specific areas, including:◾

how to report suspected violations of the Code, and prohibiting retaliation against persons who report such violations in good faith;
respect for human rights, diversity and inclusion;◾ conducting business with integrity, fairness and respect;◾ giving and receiving gifts and entertainment;◾ complying with all laws and regulations, including anti-corruption/bribery and antitrust/competition laws;◾ lobbying and political contributions;◾ full, accurate and timely public disclosures, including financial reporting;◾ prohibiting insider trading;◾ compliance with environmental, and occupational health and safety laws;◾ protecting personal data;◾ respect for human rights, diversity and inclusion;◾

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Annual Information Form◾

careful communication, and protecting confidential and personal information;
managing conflicts of interest;◾ giving and receiving gifts and entertainment; and◾ compliance with related corporate policies.
◾

The Code, which is disclosed on the “For Employees” section of our website (www.magna.com) and posted on our employee intranet in 26
different languages, is reviewed regularly with all amendments approved by the Board. We have also supplemented the requirements of theCode through the adoption of policies covering specific topics, including: bribery and improper payments, tooling practices, gifts andentertainment, anti-retaliation, careful communication, conflicts of interest, sanctions and trade embargoes, antitrust and competition, data
privacy, and the conduct of internal ethics investigations (all of which are also available on our website (www.magna.com)).
4.5.2

Global Compliance Program
In order to help our employees understand the values, standards and principles underlying ourCode, we have implemented a global compliance program (the “Program”) overseen by the
Audit Committee, which includes training of employees through different modalities (e-learning
live in-person, and virtual instructor-led) on various topics relating to compliance and ethics. We
also provide specialized compliance training modules which target specific functional audiences
and high-risk regions. In addition to providing training on compliance and ethics topics generally,
these specialized modules are designed to be interactive and incorporate real-life scenariosand exercises, which we believe amplify our Program expectations and resonate more
powerfully with participants.
The Program is supervised by the Magna Compliance Council (“Compliance Council”), a bodythat includes key corporate officers representing our finance, legal, human resources,
operations, internal audit, sales and marketing, technology, information, research anddevelopment, and compliance functions. The Compliance Council is tasked with, among otherthings, providing overall direction for our Program, approving key initiatives and ensuring thatthe required elements of our Program are being carried out globally by our cross-functional
Operating Group Compliance Committees.

For the third year in a row, in 2024 Magna was selected as a World’s Most Ethical Companies Honoree® by Ethisphere, a global leader in
defining and advancing standards of ethical business practice.

4.5.3~40,000

~100%

~100%

employees completed
annual Code of Conduct
e-learning in 2023

of customer facing
employees completed antitrust
training since 2015of new or recently
promoted people managers
completed advanced ethics
training since 2015

Magna Hotline

The Magna Hotline is a whistle-blower hotline. The Hotline is confidential and reporters can remain anonymous (except where local law
requires disclosure of a reporter’s identity), and is available for employees and other stakeholders such as customers and suppliers at alllevels of our supply chain to make reports by phone or online at any time in 27+ languages. Reports are received and tracked by anindependent third party service provider. Reports to the Magna Hotline (other than reports of an HR nature) are reviewed by our Internal
Audit Department and, when appropriate, an investigation is conducted in accordance with our Policy on Internal Ethics Investigations.
Investigations are conducted by Magna’s Internal Audit Department, Corporate Security team, In-House lawyers and/or external counsel(where applicable). We maintain an Investigations Oversight Committee, a sub-committee of the Compliance Council, which meets quarterly(and on an ad hoc basis, as needed) to review such investigations to ensure consistency of discipline and promote early awareness andoversight. The Audit Committee receives quarterly presentations from the Vice-President, Internal Audit regarding Magna Hotline activity
and details of compliance, fraud, financial reporting, and other investigations (other than HR-related investigations).

4.6

Lobbying & Political Engagement

Magna is committed to upholding the highest standards of integrity in our lobbying activities and political engagement. Our approach to
conducting such activities in accordance with applicable law and ethical norms, and in alignment with our sustainability commitments, is asfollows:
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4.6.1

Core Commitments

Our core commitments in this area are:◾ Lobbying: Magna pledges to comply with applicable law and uphold the highest levels of integrity in all lobbying efforts. Our lobbying
strategies and practices are designed with the best interests of our stakeholders in mind and reflect the core values of our company.
We are committed to honest and ethical engagement with policymakers.
◾ Political Engagement: Magna is committed to being a responsible corporate citizen, which includes ensuring compliance with applicablelaw regarding political contributions and expenditures.
◾ Comprehensiveness of Commitment: Our commitment to integrity in lobbying is holistic, encompassing all areas of our business andsupported by senior management. A dedicated governance structure ensures adherence to this strategy, with accountability assigned
at the corporate level.
Our strategy supports Magna’s interest in promoting public policies relevant to Magna and educating policymakers about our business,while complying with all relevant laws and regulations governing lobbying and political contributions or expenditures for federal, state, or
local elections, including the reporting and disclosure of such amounts.
4.6.2

Implementation Measures

In order to give effect to our commitments we undertake a number of measures:◾ Disclosure: Detailed information about our lobbying activities as required by law.
◾ Approval Procedures: Magna has established a pre-approval procedure (“Disclose It” reporting system) for expenditures or government
officials.
◾ Stakeholder Engagement: While our strategy is comprehensive and supported by management, we recognize the importance of
involving stakeholders in the development and discussion of our lobbying strategies at the corporate level. Efforts to enhance
stakeholder involvement are ongoing.
Magna will comply with all applicable laws and regulations governing campaign finance, political contributions, or expenditures for elections
and political activities, including reporting and disclosure requirements. Magna regularly consults inside and outside legal counsel to confirm
its political expenditures and other political and lobbying activities are undertaken in compliance with applicable law and this strategy.
Magna’s lobbying strategy is subject to regular review and updates to reflect changes in legal requirements, and industry best practices.

4.7

Data and Cybersecurity/Privacy

4.7.1 Enterprise Cybersecurity
Our enterprise cybersecurity strategy was developed by our Information Security, Risk and Compliance Department (“ISRC”) which ultimately
reports to our EVP and Chief Digital and Information Officer. The strategy has been designed using guiding principles from our Code as wellas enterprise risk considerations and aligns with industry standards including the National Institute of Standards and Technology, relevant
ISO standards, and applicable customer requirements. Our Board has risk oversight responsibility for Magna’s enterprise IT/information
security systems and cybersecurity program and receives reports regarding the program at periodic meetings.
Our cybersecurity initiatives are based on five key considerations:◾

Identify – develop an organizational understanding of cybersecurity risk to systems, people, assets, data, and capabilities;
Protect – develop and implement appropriate safeguards to ensure against cybersecurity risk and continue to deliver critical services;◾ Detect – internal and external 24 × 7 monitoring of all information traffic for cyber-attacks, including ransomware and other malware;◾ Respond – our Security Operations Centre has appropriate incident response plans/processes and the necessary resources andexpertise to respond to detected threats; and◾ Recover – our Security Operations Centre works with IT operations to recover as quickly as possible by rebuilding affected systems
and restoring data back-ups.
◾

We are committed to working with our customers and other stakeholders to ensure that appropriate cybersecurity standards andrequirements are continually monitored and implemented as required. In addition, we ensure that we comply with all governmental rules andregulations regarding cybersecurity or privacy regulations (such as GDPR as defined and detailed below), which directly affect cybersecurity
requirements. Our selection process for third party (e.g. Cloud-based) services includes a due diligence approach that ensures that suchservices are evaluated using industry standard security assurance approaches to assess and address the risks associated with third party
technology services and aligns with our overall approach to cybersecurity.
We regularly evaluate and adjust our information security management strategy based on a variety of considerations including risk
assessments, continuous monitoring and periodic independent cybersecurity maturity evaluations. This enables the ISRC to identify andprioritize responses to residual risk arising from changes to our business or the ever-changing threat landscape. Magna has developed andimplemented centralized enterprise cybersecurity policies, compliance measures, as well as training and awareness programs designed toensure that our cybersecurity strategy is executed to minimize our exposure.
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Annual Information Form

Governance of cybersecurity over our shared global telecommunications and computer infrastructure is centralized under the ISRC. The
ISRC facilitates identification of our risk exposures and mandates the implementation of appropriate security controls. We have processes
in place to ensure that our IT systems receive appropriate upgrades, including patching and other protective measures, in a timely manner.
4.7.2

Product-Embedded and Solution Software Cybersecurity

In addition to the above centralized initiatives, our decentralized operating model assigns cybersecurity accountability to our OperatingGroups with respect to risk/security issues inherent in products. However, the ISRC provides various standards-based approaches to assist
our Operating Groups in assessing their respective product cybersecurity risk and maturity. From this assessment, our Divisions andOperating Groups are then able to determine appropriate cyber solutions that may be required. Our Technology Committee supports theBoard through the committee’s risk oversight responsibility for Magna’s product-embedded or solution software cybersecurity.
4.7.3

Privacy

Magna is committed to preserving the privacy of our stakeholders in accordance with applicable laws. Our Code articulates our approachto the privacy of our employees and protection of their personal information. We only collect, use and disclose personal information for
legitimate business or employment purposes, as required by law, or with an individual’s consent. In addition, like any other asset, confidential
information which includes trade secrets and proprietary information is a valuable part of our business and we aim to safeguard it.
Magna has established a data privacy organization and program in our divisions in the E.U., Morocco, Brazil, Thailand, and China. The
program includes the issuance of policies and procedures, employee training, gap assessments and the implementation of a data privacy
management system.
In addition to our general privacy and confidentiality commitments, our Global Data Privacy Policy (the “Privacy Policy”) has been established.
The Privacy Policy is designed to guide our compliance with, among others, the E.U. General Data Protection Regulation (“GDPR”), China’s
Personal Information Protection Law, the Brazilian General Data Protection Law and Thailand’s Personal Data Protection Act.
The Privacy Policy sets out general data protection principles, responsibilities of data controllers and processors, circumstances underwhich personal data can be transferred, rights of data subjects and actions that must be taken in case of data breach, as well as addressing
data retention periods. The Privacy Policy is accompanied by a variety of formal and comprehensive procedures, developed and overseen
by our Compliance Council.
A training program has been implemented to address general data privacy awareness for all employees and provide more specific rules for
those employees who are handling personal data as part of their daily work. Finally, those employees across our organization responsible
for handling privacy requests by data subjects or for addressing data breaches have been provided with the tailored training and resources
to carry out such responsibilities.
Furthermore, Magna continues to monitor legislative and regulatory developments in the fast-changing data privacy landscape in otherregions with Magna operations.

4.8

Supply Chain Responsibility

4.8.1

Supplier Code of Conduct

We hold ourselves and our suppliers to high ethical standards. Our Supplier Code of Conduct and Ethics (“Supplier Code”) is a foundational
document in our business relationships with suppliers. It outlines the principles we apply internally at Magna through our Code, as well as
expectations we have for every company that supplies goods or services to Magna, relating to, among other things:◾ ethical business conduct, such as compliance with antitrust/competition, anti-corruption/bribery and export controls laws; conflictminerals reporting; avoidance and reporting of conflicts of interest; and protection of Magna intellectual property and confidential
information;◾ employee rights, including those rights set out in our Employee’s Charter, Global Working Conditions and Global Labour Standards
Policy; and◾ environmental responsibility and compliance.
The Supplier Code forms an integral part of our overall contractual relationship with our suppliers. We expect the standards set out in the
Supplier Code to be met by our suppliers, even in jurisdictions where meeting such standards may not be considered part of the usualbusiness culture and a failure to do so can result in the termination by Magna of the supply relationship. The full text of our Supplier Code isavailable on our website (www.magna.com).
We continue to support and participate in industry efforts to develop common standards relating to business ethics, environmental
standards, working conditions and employee rights. We will continue to engage with our suppliers to raise awareness of the importance ofsustainability in our supply chain.
4.8.2

Human Rights and Global Working Conditions in our Supply Chain

Magna seeks to fully comply with all applicable labor and other laws in all jurisdictions in which we operate. While such jurisdictions have arange of different laws, Magna’s policy framework applies equally to all our operations across the globe to establish a common and
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consistent baseline for the fair treatment of our own employees, as well as those in our supply chain. This policy framework, which includes
our Code, Supplier Code and Global Labour Standards, articulates our fair enterprise culture and serves as a general endorsement of thehuman rights and international labor standards reflected in the United Nations Universal Declaration of Human Rights, International Labour
Organization (“ILO”) Fundamental Conventions, and ILO Declaration on Fundamental Principles and Rights at Work. Our policy framework,
which is discussed in greater detail in Sections 3.2.1, 3.5.1 and 3.7.1 of this Sustainability Report, reflects an express and unequivocal
prohibition on the use of forced or child labor – both internally and by suppliers. We expect that our supply chain will adhere to our Global
Working Conditions and our Supplier Code, which have a strong focus on protection of human rights and working conditions, includingprohibitions on the use of child, underage, slave or forced labour. Our Global Working Conditions are an integral part of our supplier packagethat emphasize the importance of maintaining global working conditions and standards that result in dignified and respectful treatment of all
employees within all our global operating locations, as well as those of our supply chain. A failure by any of our suppliers to comply with its
terms can result in the termination by Magna of the supply relationship.
With respect to third party service providers and staffing agencies, we maintain a number of oversight and due diligence practices, including:a global policy on “Doing Business with Staffing Agencies and 3rd Party Service Providers” that sets out best practices when doing
business with 3rd party vendors supplying labour-related services to Magna, including: due diligence requirements; prohibition on theuse of fees or worker debt arrangements that might result in conditions leading to debt bondage; requirements for transparent
employment terms; and conducting checks on contract workers for the purposes of verifying ethical and legally compliant employment
conditions;rd◾ service agreement templates for use with 3 party labour suppliers to ensure that contingent workers are subject to the same ethicalstandards applicable to Magna’s regular full-time employees. The service agreement templates include, among other things, robust
audit and investigation provisions;◾ a system for reporting non-compliant suppliers and which is designed to ensure that we do not do business with prohibited suppliers;and◾ a global Labour and Employment Audit program designed to assess HR compliance-related issues, policies, and practices at the local
Divisional level and adherence to both Magna policy and local laws, in a variety of areas, including fair working conditions and preventionof forced and child labour.
◾

In addition, during the first half of 2024, we are planning to roll out mandatory enhanced compliance training on responsible sourcing andglobal supply chain laws, covering such issues such as child labour, human trafficking, forced labour, and the responsible use of third party
labour brokers.
4.8.3

Supply Chain Management

4.8.3.1

GeneralMagna’s supply chain management group focuses on a number of elements that we believe are integral to world class supply chain
management, such as: standardized supplier quality and delivery performance ratings; specific roles and responsibilities; processes andstandards; global training; and risk management. The supplier quality and delivery performance ratings have been established to help
optimize business award decisions. We use cross-functional sourcing teams, in the majority of our sourcing decisions, to help ensurecompliance with our internal standards when we place new business within our supply base. In order to promote awareness of the key
elements of our supply chain risk management program, including the requirements in our Supplier Code, we provide global on-line training
on an ongoing basis to internal purchasing employees.
We continue to increase digitization of our supply chain management, including focusing on spend analytics and online transportation risk
tracking, as well as electronic tagging and tracing of certain assets.
As part of our strategy to improve sustainability performance across our supply chain, we are developing an ESG component for our
program award criteria, as discussed under “Supplier Reviews” below.

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Annual Information FormOur governance framework and key activities with respect to supply chain ESG risk management is set forth below:
Governance
Cross-functional team led by Supply Management, a function within Procurement, with cross-functional
representation from legal, ethics and compliance, human resources, sustainability and other functions, that
determines Magna standards and oversees global implementation and execution of key due diligence andother supply chain activities

Policies

Engagement

Supplier CodeGlobal Labour
Standards
Terms & Conditions
Sourcing
Requirements

Day-to-day directinteractions with
suppliers
Dedicated Supplier
ESG Roundtables
Communications
through SupplierportalIntegrated Supply
Management withOperating Group
Procurement leaders
Live “All supplier”
communications

Assessment &Monitoring

Investigation &Remediation

Supplier SelfAssessment
Questionnaires (“SAQs”)
Third-party AI
platform for supply
chain mapping,supplier scoring, andlive alert monitoring

Investigation andcase management
system to gather
information andexecute control andoversight of any
necessary mitigating
actions

Supplier emissions
reporting platform
Other third party tools
and databases
RSCI on-site audits,
where necessary
Internal or customer
initiated risk
assessments
Grievancemechanism withdedicated supplier
tier

Corrective actionplans generated
through SAQs andon-site audits
Potential desourcingof supplier, where
warranted

Internal Supplierratings to support
sourcing/desourcing
decisions

4.8.3.2

Supply Chain ESG – Continuing to Enhance Transparency and Sustainability Performance

In order to enhance transparency into our supply chain and work towards a more sustainable supply chain, we have made several
enhancements to our supply chain management program in recent years:◾ We have implemented a third party supply chain risk monitoring and mapping tool, which monitors and provides real-time alerts
affecting supply chains, including: human rights risks (i.e. forced/child labour), operational issues, financial or legal issues, CSR incidents(i.e., environmental incidents, poor working conditions), industrial accidents, product incidents (i.e., recalls), cyber risks, natural
disasters, governance risks (i.e., corporate wrongdoing), labour unrest, and political unrest;◾ We request our suppliers to report on their energy usage and emissions – a critical step in better understanding our Scope 3 emissions
and executing on reductions in Scope 3 emissions in order to meet our near-term and net-zero science-based targets;◾ We invite certain suppliers to respond to self-assessment questionnaires through NQC, a third party supply chain management
organization who will be responsible for data collection and analysis via their SupplierAssurance platform. The self-assessment
questionnaires (currently SAQ 5.0) which is a standard automotive industry sustainability questionnaire developed by global OEMs.
The SAQ which Magna completes for requesting OEM customers annually, requires information, including documentation, relating toseveral topics, including, among other things: sustainability management; working conditions and human rights; health and safety;
business ethics; environmental compliance; supplier management; and responsible sourcing of raw materials, as well as questions
specifically addressed to German Act (as defined below) compliance;◾ During 2023, we enhanced our complaints mechanism, the Magna Hotline, to create a separate submission tier for our supply chain;◾ We have launched Supplier Roundtables to engage key suppliers on topics including energy reduction, decarbonization, sustainable
materials and products, supply chain resiliency, and human rights and working conditions;◾ Magna is a founding member of the Responsible Supply Chain Initiative (RSCI), an association of automotive OEMs, Tier 1 Suppliers
and industry associations, which has established an assessment program for due diligence in the automotive supply chain relating tosocial compliance, occupational safety and environmental protection. We initiated several RSCI audits of suppliers in 2023 and are
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planning to grow our third-party audit program in 2024. Magna has also had several of its employee trained as RSCI auditors to
support our supply chain due diligence activities; and◾ We have been accepted as a member company of the German automotive industry dialogue (“Branchendialog Automobilindustrie”).
The industry dialogue is a multi-stakeholder forum consisting of relevant participants from the automotive industry as well as civilsociety with expertise on human rights risks in automotive supply and value chains;
We continue to monitor compliance with emerging supply chain regulations that apply to our operations, including:◾ the German Supply Chain Due Diligence (Lieferkettensorgfaltspflichtengesetz (LkSG)) (the “German Act”) which came into force
January 1, 2023, and which imposes a duty on companies, including several Magna subsidiaries in Germany, to make reasonable due
diligence efforts to determine if there are violations of human rights or environmental obligations in their own business operations or in
the their supply chain. We have appointed a Human Rights Officer (HRO) to oversee our compliance with the German Act. Seniorpersonnel that reports directly to the HRO, coordinates implementation of activities implemented to meet obligations under the law,
together with a cross-functional team that includes representatives from our compliance, legal, HR, environmental and purchasing
functions. We also have a global advisory board comprised of senior Magna leadership that provides guidance and receives periodic
reports on the activities of the HRO and the German Act compliance team. We are in the process of finalizing a global Company
Statement focusing on Human Rights and Environmental issues as required by the German Act. Our first report for our subsidiaries
under the German Act will be filed in Spring 2024;◾ the U.S. Uyghur Forced Labor Prevention Act, which requires companies, starting in June 2022, to rebut the presumption that goods
coming from Xinjiang, China were not made using forced labour, by meeting forced labor due diligence standards set forth in the
Guidance published by U.S. Department of Homeland Security;◾ Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act (the “Canadian Forced Labour Act”) which came into
force January 1, 2024. Magna’s first reporting obligation under the Canadian Forced Labour Act will arise in May 2024;◾ the E.U. Corporate Sustainability Due Diligence Directive (CSDDD) approved by the European Council in March 2024 that, once
formally adopted, would mandate supply chain due diligence relating to human rights and environmental matters in E.U. member
states; and◾ the E.U. provisional agreement on a new forced labour regulation that, once formally adopted, would ban products made with forced
labour from being sold in, or exported from, the E.U.
4.8.3.3

Supplier Reviews

We currently review production suppliers in order to assess their overall operational, performance and financial health. We use a scorecard
to provide ongoing monitoring and assessment of suppliers, which tracks (among other things) whether suppliers have certain industryrecognized environmental and health and safety certifications, such as ISO 14001 and ISO 18001. We are in the process of introducing
another pillar covering ESG to our supplier review scorecard process.
No production suppliers were terminated in 2023 as a result of a violation of working conditions or human rights. We have terminatedbusiness relationships with a number of temporary staffing/labour agencies that did not meet the requirements of our global staffing agency
policy discussed in Section 4.8.2 above.
4.8.3.4

Phytosanitation Program

We maintain a phytosanitation program aimed at preventing the introduction and spread of plant diseases (i.e., pests and mold) through thecross-border import/export process. Our phytosanitation policy which applies to suppliers and shippers aligns with the International Plant
Protection Convention (IPPC) standard for treatment of wood packaging material (e.g., wooden pallets), and includes the requirements of
ISPM-15 (International Standards for Phytosanitary Measures). Our phytosanitation program includes training sessions for internal employees
and suppliers, as well as reviews aimed at confirming compliance with our policy.
4.8.3.5

Supplier Diversity

To support the supplier diversity efforts which form part of our supply chain management program, we participate as a corporate memberof several industry-recognized suppler diversity organizations, including:◾

the National Minority Supplier
Development Council (NMSDC)◾

National Veteran Business Development
Council (NVBDC)◾

Women’s Business Enterprise National
Council (WBENC)◾

the Canadian Aboriginal and Minority
Supplier Council (CAMSC)◾

the National LGBT Chamber ofCommerce (NGLCC)◾

Disability: IN◾

Women Business Enterprises Canada
Council (WBE Canada)◾

Great Lakes Women’s Business Council(GL-WBC)◾

WEConnect International◾

Michigan Minority Supplier
Development Council (MMSDC)

In addition, we are supporters of the Michigan Hispanic Chamber of Commerce (MHCC), the US Hispanic Chamber of Commerce (USHCC),
the Asian Pacific American Chamber of Commerce (APACC), the Detroit LGBT Chamber of Commerce, the Veteran Owned Business
Roundtable (VOBRT), the Council of Supplier Diversity Professionals (CSDP), the Mid-South Minority Business Continuum (MMBC), andA-37

Annual Information FormThe National Business League. We are also involved with a number of supplier diversity advocacy events, conferences, and procurement
fairs, including many organized by our OEM customers, such as GM Supplier Inclusion Board, Stellantis MatchMaker, BMW Supplier
Diversity Conference, Toyota Opportunity Exchange and Honda Network Partnership.
4.8.3.6

Conflict Minerals Reporting

Consistent with the approach taken by our customers, suppliers and other fellow members of the Automotive Industry Action Group withrespect to “conflict minerals”, we are engaged in an annual process of determining whether any products which we make or buy containsuch “conflict minerals”. Our latest conflict minerals report is available on our website www.magna.com and on the SEC’s EDGAR website(www.sec.gov/edgar). We continue to engage with our suppliers to increase awareness, and accuracy, of “conflict minerals” reporting
requirements and, through our membership in the Responsible Minerals Initiative (RMI), support continuing cross-industry efforts to identify
and validate conflict-free smelters and refiners. We also report to requesting OEM customers with respect to Cobalt and Mica.

4.9

Contributing to Communities in Which we Operate

4.9.1 Commitment to Communities and Society
Magna recognizes the importance of giving back to society. We have a long history of supporting many global social and charitable causes,
primarily in the communities around the world in which our employees live and work.
While much of our corporate giving is to general philanthropic causes, we have identified seven United Nations Sustainable Development
Goals that most directly relate to our business. Examples of Magna’s activities and accomplishments with respect to each relevant
Development Goal is as follows:

Ensure healthy lives
and promote wellbeing for all at all ages◾

Since 2017, more than $1.3M has been raised from employee donations and Magna’s Matching
program through annual participation in the World Vision Global 6K for Water, which aims to bringlife-changing clean water to communities in need. The Suppliers Partnership for the Environment(SP) – an association of global automakers and their suppliers working together to advanceenvironmental sustainability through the automotive supply chain – previously awarded Magna SP’s
Community Impact Award for our support of the Global 6K for Water challenge◾

Magna’s corporate wellness initiatives help support the ongoing physical and mental health of employees
globally◾

Magna has contributed over $25M toward medical infrastructure and over $1M to the Red Cross andother organizations to aid with global disaster relief efforts. Magna’s Employee Disaster Relief Fund
provides financial assistance to eligible employees and their families in the event they are victims of adisaster. In 2023, the program helped 46 employees in Austria, Canada, China, Czech Republic, India,
Italy, Mexico, Poland, Slovenia, Turkey, and the United States. An additional 403 employees in China
were supported with humanitarian aid relief after a typhoon destroyed a local community, and Magnaalso made a donation to the Red Cross to assist their efforts in response to the earthquake in parts ofTurkey and Syria.

◾

Magna locations around the globe organize food drives and fundraisers to support local foodbanks andto address food security

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Ensure inclusive andequitable quality
education andpromote lifelong
learning opportunities
for all◾

Magna sponsors and actively participates in FIRST Robotics globally to encourage students to consider
careers in science, technology and engineering. FIRST organizes mentor-based programs that help
participants build science, engineering and technology skills while also fostering self-confidence,
communication skills and leadership◾

Magna embraces a culture of learning, including a program that pays for employees to pursue jobrelated certificate programs and university degrees◾

Employees can access Magna-sponsored scholarships for their children to pursue university degrees◾

We have partnerships in several countries with universities and technical institutions to develop a talentpipeline and help promote skilled trades development◾

Magna sponsors several regional and international skills competitions through WorldSkills to enhance
technical trades development and growth opportunities for students◾

We support the Canadian Institute for Advanced Research a Canadian-based global researchorganization that brings together teams of top researchers from around the world to address importantand complex questions◾

We support Skills USA and Ontario, organizations that champion and stimulate the development ofworld-class technological and employability skills for youth◾

In 2023, we began to support Relay Education’s Renewable Energy STEM (Science, Technology,
Engineering, and Math) workshops which provide support for thousands of kids in communities Magna
operates in, from the United States, Austria and Mexico. These workshops bring interactive STEM
experiences to students who otherwise may not have access to such programming.

◾

Magna’s Women’s eXchange Employee Resource Community strives to empower, develop andrecognize its female employees and encourage students to pursue STEM careers.

◾

We hosted the Women of Inforum@CES 2023 networking event in conjunction with Inforum, a nonprofit
dedicated to accelerating the careers of women and building talent initiatives at companies◾

Magna’s Board has adopted a Board Diversity Policy targeting gender parity (achieved if the balance
between male and female directors ranges between 40% and 60%, assessed over a three-year
timeframe). Currently, 38% of our Board members are women, rising to 42% on May 9, 2024, assuming
election of all nominees for Magna’s annual meeting of shareholders.

◾

Since 2016, Magna has spent more than $2.1 billion with women-owned businesses/suppliers as part ofits overall supplier diversity program◾

Magna celebrates and honors the many contributions of women around the world, including annuallycelebrating International Women’s Day through live global events for employees to connect with andhonor outstanding women in the company

Achieve genderequality and empower
all women and girls

Magna:◾

Build resilient
infrastructure, promote
inclusive andsustainableindustrialization andfoster innovation

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completed thousands of energy/sustainability projects in recent years, resulting in significant andongoing energy, emission, and costs savings throughout its global operations. Some examples ofsustainable projects in our company are:◾

a Cosma Division in Mexico installed a photovoltaic (solar) panel system which can produce
approximately 825 MWh of electricity annually.

◾

An Exteriors Division in China installed a photovoltaic (solar) panel system which can produce
approximately 5,200 MWh of electricity annually.

◾

created a Global Bold Perspective Award to showcase student vehicle designs of the future. The
automotive design competition annually selects a winner from entries from students in North America,
Europe and China◾

Sponsored the development of The Scanlon Creek Nature Centre in Ontario. Based on universal design
and net-zero carbon principles, construction of this new building will create a community hub where
people of all ages and abilities can access award-winning, innovative programming that connects themto nature while building environmental knowledge and awareness.

◾

Continued to grow our annual Commitment to Sustainability Awards, which are open to Magna’s
Divisions globally and focus on three categories: (i) product excellence and innovation; (ii) process
improvements that advance lean and sustainability efforts; and (iii) people – programs that overcome
employee and community challenges in the areas of education and training, health and safety, diversity
and inclusion, and other areas of social impact.

Annual Information Form

Reduce inequality
within and among
countries◾

Magna’s race and ethnicity-focused (EDGE), LGBQT+ and Allies (PRIDE) Employee, and Women’seXchange Resource Communities, support employee-led learning opportunities to foster open dialogue
and understanding, as well as opportunities for mentoring and career development◾

42% of Board nominees for election at Magna’s annual meeting of shareholders are diverse nominees(based on LGBTQ+ or being an underrepresented minority in their home country)◾

Since 2016, Magna has spent more than $3.7 billion with Minority-owned businesses/suppliers as partof its overall supplier diversity program◾

Unconscious bias training is required for all managers and available to any Magna employee◾

Magna partners with various United Way agencies in North America to support a broad number oforganizations that are delivering community-based solutions to address poverty and inequalities◾

Magna has partnered with other industry leaders to support a variety of poverty-reduction efforts in the
Greater Detroit and Greater Toronto Areas, including support for Pope Francis Center and Inn from theCold, organizations that provide vital services to people experiencing homelessness

Magna:

Ensure sustainableconsumption andproduction patterns◾

has implemented a zero waste to landfill target. Approximately 92% of total waste outputs fromoperations in 2023 were recycled or diverted from landfills, rising to approximately 96% if energy
recovery is included◾

purchased 22% of its global electricity from renewable electricity sources (13% of our global energy
purchase was renewable)◾

reduced its energy intensity by approximately 11%, exceeding the 1-year 10% stretch goal set for 2023◾

met its long-term (2030) water use reduction target, having achieved a 15% reduction in water
withdrawals in 2023 against our 2019 baseline◾

has received Performance Standard certification from the Aluminum Stewardship Initiative (ASI) for five of
its Divisions in Europe. ASI is the only voluntary sustainability standard for the aluminum value chain.
ASI’s independent third-party certification focuses on material stewardship, including as it relates to
product design, life cycle assessments, management of process scrap, and recycling of products at
end-of-life◾

recognized our Cosma Division in Mexico with a Commitment to Sustainability Award for its innovative
process allowing savings in electricity consumption and automated temperature controls at the facility.

◾

recognized its Seating Division in Poland with a Commitment to Sustainability Award for hostingeducation sessions on sustainability that lead to brainstorming and energy treasure hunts at the facility.

◾

is pursuing several packaging and logistics initiatives and aligning with industry partners to limit theoverall use of materials and to increase transportation efficiency across the supply chain, including
publication of automotive packaging guidelines through a committee of the Suppliers’ Partnership for theEnvironment which Magna Co-Chairs

Magna:Take urgent action tocombat climatechange and its
impacts◾

has approved near- and long-term science-based emission reduction targets with the SBTi, and the SBTi
has verified our net-zero science-based target by 2050◾

is committed to achieving 100% renewable electricity usage by 2025 in its European operations and by2030 in its global operations. 103 Divisions currently use renewable electricity, with 75 Divisions at 100%
renewable electricity.

◾

is a financial sponsor of the Technical Office of the International Sustainability Standards Board (ISSB)
that is establishing a comprehensive global baseline of climate change-related disclosure standards

Magna International Inc.

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5.

Sust ain a b i l i ty M etr i cs

In this Sustainability Report we report according to the SASB framework, and the ISSB IFRS S2 Climate Related Disclosures Standard in
relation to Scope 1, 2 and 3 emissions. SASB establishes and maintains industry-specific standards that assist companies in disclosing
sustainability information to investors. SASB metrics indicated below are identified by the relevant SASB Auto Parts Sustainability AccountingStandard code. We currently obtain independent, third party validation of our Scope 1 and 2 emissions data, as well as our water withdrawal
data. We are committed to continuing to enhance both the data collection/validation processes and thus the quality of the data, in the
coming years.

5.1

Energy Management and Emissions

5.1.1

EnergyEnergy management data is set out below.
SASB Accounting Metric (TR-AP-130a.1)

Aggregate amount of energy consumed by Magna
Percentage of energy consumed by Magna that was supplied from gridelectricity
Percentage of energy consumed by Magna that is renewable energy2023(1)

2022

2021

20,077,657 GJ
5,577,127 MWh

19,859,666 GJ
5,516,574 MWh

19,681,540 GJ
5,467,094 MWh

59.0%
12.9%(2)58.0%
8.8%(2)

57.0%
8.2%

2023

2022

2021

130 MWh/USDm

146 MWh/USDm

149 MWh/USDm

Notes:(1) Preliminary data.
(2) The percentage of renewable electricity used in 2023 was 22% (17% in 2022).

Energy intensity relative to Sales is as follows:

Energy Intensity (MWh/Sales (USDm))

In connection with our efforts to promote energy efficiency, we developed 1-year, 2-year, and 5-year energy reduction targets as detailed in
Section 2.3.1 above. In 2023, we met our 1-year stretch target of reducing our energy intensity (measured in MWh/USDm sales) compared
to 2022, achieving an approximately 11% reduction.
Emissions
Energy consumed can be converted to CO2 emissions based on regional conversion factors. In order to help us and our stakeholders better
assess trends related to the emissions we generate, we track emissions “intensity” on the basis of total sales, employee headcount andaggregate square footage of our facilities and offices. These intensity metrics assist us in determining whether we are becoming more
efficient by normalizing emissions on a per dollar of sales, per employee and per square footage basis. The raw data for Scope 1 & 2
emissions, together with intensity metrics are set out below. Magna adheres to the GHG Protocol Corporate Accounting and ReportingStandard (“GHG Protocol”) for its Scope 1 and 2 reporting. Magna adheres to the GHG Protocol Corporate Value Chain (Scope 3) Standard
and guidance from the SBTi for its Scope 3 reporting. We use commonly accepted emission factors such as those available from the GHG
Protocol, International Energy Association (IEA), United States EPA, including its eGrid database, United Kingdom Department for Energy
Security and Net Zero, ecoinvent and CEDA (Comprehensive Environmental Data Archive), as well as other local or regional references. Our
Scope 1 and 2 emissions data is verified annually by an independent third party verification firm.
ISSB S2, 29(a)(i)

2023

2022

2021

Scope 1 Emissions (metric tons)

424,561433,636436,267

Scope 2 Emissions (metric tons)(1)1,150,656

1,168,803

1,089,730

Scope 1 & 2 Emissions (metric tons)(2)

1,575,217

1,602,439

1,525,997

Sales (USD, millions)
Sales Intensity (CO2 metric tons/$ Sales)
Employees
Employee Intensity (metric tons/employee)
Square Footage (million sq. ft)
Square Footage Intensity (metric tons/sq. ft.)

42,797

37,84036,2420.0000368

0.0000424

0.0000421

179,000

168,000

158,000

8.8

9.5

9.7

83.8

84.4

83.5

0.01880.01890.0183

Notes:(1) Market-based emissions calculation method.
(2) Sales Intensity, Employee Intensity and Square Footage Intensity are calculated based on combined Scope 1 and 2 Emissions.

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Annual Information FormIn connection with our net-zero commitment and submission of near-term and net-zero targets to SBTi for validation, we submitted ourscope 1, 2 and 3 baseline emissions for 2021 as per the table below:
Emission Type

2021 Baseline Year

Scope 1 (tCO2e)436,267

Scope 2 (tCO2e)

1,089,730

Scope 3 (tCO2e)

58,655,441

Total

60,181,438

5.2

Water and Waste Management

5.2.1 Water
We have implemented a 1.5% per year water reduction target, with the aim of reducing water use 15% by 2030, in each case referencing
2019 as the baseline year in which we withdrew 7,740 ML of water. Our water withdrawals in 2023 represent a 15% reduction from our2019 baseline, meeting our overall 2030 target. Water withdrawal data is verified annually by an independent third party verification firm.
Water withdrawal data is set out below:
Description

2023

2022

2021

Water withdrawals (ML)

6,571

6,292

6,922

5.2.2

Waste Management

Waste reduction and scrap elimination are important considerations in our manufacturing activities, including as part of our efforts to achieve
operational excellence in our facilities globally. We have implemented a zero waste to landfill target, with the aim of eliminating landfill-boundwaste.
Waste data is set out below:2023(1)

2022

2021

1,365,712 t

1,476,282 t

1,178,619 t

Percentage of waste generated by Magna that is hazardous

3.9%(2)

4.3%(2)7.0%

Percentage of waste generated by Magna that was recycled(3)87.2%(3)88.4%

SASB Accounting Metric (TR-AP-150a.1)

Aggregate amount of waste generated from manufacturing by Magna

91.8%

Notes:(1) Preliminary data.
(2) Approximately 92% of such hazardous waste was diverted from secure landfills through recycling, reuse, or energy recovery initiatives in 2023 (90% in 2022).
(3) For 2023, this figure would be 96.2% if energy recovery was also included as a category of recycled waste (90.9% in 2022).

5.3

Environmental Remediation

The aggregate costs incurred in complying with environmental laws and regulations, including the costs of clean-up and remediation, have
not had a material adverse effect on Magna to date and are set out below.
Description

2023

2022

2021

Annual remediation expenses<$1.0m<$1.0m<$1.0mAggregate remediation balance for known events$18.8m$16.3m$14.1m1

0—$30,000

N/A—

Environmental Violations > $10,000 USD
Amount paid (in USD) as a result of such Environmental Violations

5.4

Product Safety

Magna is at risk for product warranty, product liability and recall costs, and is currently experiencing increased customer pressure to assume
greater warranty responsibility. Certain customers seek to impose partial responsibility for warranty costs where the underlying root causeof a product or system failure cannot be determined. For most types of products, we only account for existing or probable product warranty
claims. However, for certain complete vehicle assembly, powertrain systems and electronics contracts, Magna also records an estimate of
future warranty-related costs based on the terms of the specific customer agreements and/or Magna’s warranty experience. Product liability
and recall provisions are established based on Magna’s best estimate of the amounts necessary to settle existing claims, which typicallytake into account: the number of units that may be returned; the cost of the product being replaced; labour to remove and replace thedefective part; and the customer’s administrative costs relating to the recall. Where applicable, such provisions are booked net of recoveries
from sub-suppliers and along with related insurance recoveries. Due to the uncertain nature of the net costs, actual product liability costs
Magna International Inc.

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could be materially different from our best estimates of future costs. In 2023, our warranty expense (net) decreased by $16 million compared
to 2022. See Note 15 of our consolidated financial statements for the year ended December 31, 2023, which have been filed on SEDAR+
www.sedarplus.ca and are on Magna’s website (www.magna.com).

5.5

Fuel Efficiency

Our product strategy, which is discussed in “Section 4 – Our Business & Strategy – Our Corporate Strategy” of this AIF, includes as a coreelement the supply of product solutions which support our customers’ objectives of increased fuel efficiency and reduced vehicle CO2
emissions. We do not currently track total revenue from products designed to increase fuel efficiency and/or reduce emissions.

5.6

Materials Sourcing

The SASB Auto Parts Standard identifies critical materials as defined by the U.S. National Research Council (NRC) of which cobalt,
magnesium, tantalum and tungsten are most relevant to our products. We do not purchase such materials in their raw form, however, they
may be present in components and sub-assemblies that we purchase. Our key purchased raw materials are steel, resin and aluminum, andour key purchased components include: stampings, electronics, chips, molded parts, die casting, forging, coverstock, and wire harnesses.
See the discussion in “Section 6 – Description of the Business – Manufacturing & Engineering – Key Components and Raw Materials” of
our AIF.
We address strategic risks regarding critical materials with more limited supply and key commodities/raw materials in a number of ways,
including: diversification of suppliers; carrying excess inventory, where appropriate; and, designing and engineering our products to minimize
the use of scarce/limited materials, where not constrained by customer specifications. Risks related to continued impact from the global
shortage of semiconductors that has materially affected global automotive production volumes since 2020 and may continue having some
impact in 2024 is discussed in greater detail in “Section 4 – Our Business & Strategy – Macroeconomic, Political and Other Trends” and“Section 5 – Risk Factors” of our AIF.
We are a member of the Aluminum Stewardship Initiative (ASI), and five of our Powertrain Divisions have received certification under ASI’s
Performance Standard, which supports responsible aluminium supply chains by among other things: providing a common standard forassessing ESG performance in the aluminium value chain, and establishing requirements that can be independently audited to provide
objective evidence for meeting the criteria for certification, including product design, life cycle assessments, management of process scrap,
and recycling of products at end-of-life.
With respect to reputational risk related to critical materials, we maintain a conflict minerals program, including an annual process ofdetermining whether any of our products contain conflict minerals, and through our membership in the responsible mineral initiative (RMI)
supporting continuing cross-industry efforts to identify conflict-free smelters and refiners. We also report to requesting OEM customers withrespect to Cobalt and Mica.

5.7

Competitive Behaviour

Magna’s policy is to comply with all applicable laws, including antitrust and competition laws and have implemented a robust compliancetraining program to mitigate against the risk of an antitrust violation. Our Corporate Ethics and Compliance Program is described in
Section 4.5 − “Corporate Ethics and Compliance” of this Sustainability Report.
We previously completed a global review focused on antitrust risk and do not currently anticipate any material liabilities in connection withthe review. See “Section 10 – Legal Proceedings” of this AIF.
SASB Accounting Metric (TR-AP-520a.1)

2023

2022

2021

Total amount of monetary losses incurred as a result of legal
proceedings associated with anti-competitive behaviour regulations

NIL$1.2m(1)

NIL

Note:
(1) June 2022 settlement with the Conselho Administrativo de Defesa Economica (CADE), Brazil’s Federal competition authority, in connection with an administrative proceeding
commenced in 2019 into alleged anticompetitive behaviour regarding the supply of automotive door latches and related products.

5.8

Health & Safety

We are committed to providing a safe and healthful workplace for our employees. This commitment is fulfilled through a regular program of
health and safety audits and inspections of our global facilities. In connection with our health and safety program we track the frequency andseverity of workplace accidents and conduct post-accident reviews to develop action plans to reduce/eliminate similar accidents in the
future.
Description(2)(4)

Accident Frequency Rate(3)(4)

Accident Severity Rate
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Annual Information Form

2023(1)

2022

2021

0.50

0.62

0.59

10.2

12.4

17.4

Notes:(1) Preliminary data.
(2) Frequency 1.0 translates to 1 injury or illness per 100 employees working 40 hours/week, 50 weeks/year.
(3) Severity 10.0 translates to 10 lost work days per 100 employees working 40 hours/week, 50 weeks/year. Severity Rate is reported as of March 27, 2024, but could change,
including as a result of employees who continue to accrue lost work days in relation to an accident.
(4) Global production facilities and certain engineering locations.

The occurrence of injuries and fatalities is a matter of significant concern for both management and the Board. The TOCC reviews thecircumstances related to significant injuries and all fatalities of employees or third parties on Magna properties and reports same to theBoard. In 2023, there was 1 employee fatality at Magna facilities.

5.9

Diversity

Diversity within our employee population is important to us and we strive to create an inclusive work environment throughout our company.
As part of our efforts to promote an inclusive workplace, we track metrics relating to gender diversity in our workforce.
Description

2023

Percentage of global employees who are women (wholly owned
operations)

28.0%

2022

2021

28.0%

27.0%

Women in critical roles

(1)

18.0%

18.0%

16.0%

Women on the Board of Magna

38.0%(2)

42.0%

42.0%

Notes:(1) 885 women in critical roles out of 4958 such roles.
(2) As of May 9, 2024, the percentage of women on the Board will be 42%, assuming election of all nominees for Magna’s annual meeting of shareholders.

5.10

ReportingIn addition to this Sustainability Report, we participate in CDP, a not-for-profit project designed to provide investors with information relating
to corporate GHG emissions, water use, deforestation risk and perceived corporate risk due to climate change. Our current CDP submission
is available on our website at www.magna.com. We also file a conflict minerals report, available on www.sec.gov/edgar, in accordance with
SEC requirements, and publish a slavery and human trafficking statement on our website, at www.magna.com. Magna also provides
sustainability reporting directly to our customers. These assessments are supplier requirements and typically follow common reporting
templates approved by automotive industry associations in North America (Automotive Industry Action Group) and Europe (CSR Europe/
Drive Sustainability).
We also continue to monitor the acceleration of climate/sustainability reporting initiatives by regulators, including:◾ the European Union’s European Sustainability Reporting Standards (ESRS) and Corporate Sustainability Reporting Directive (CSRD)
which will first apply to certain of Magna’s European subsidiaries in 2025 and will be reported on in 2026 for such subsidiaries;◾ initiatives by securities law regulators to mandate climate disclosure, including the recently adopted climate disclosure rule adopted by
the U.S. SEC; and◾ the proposed implementation of Canadian sustainability standards through the Canadian Sustainability Standards Board (CSSB),
based on the ISSB Sustainability Disclosure Standards, and any proposed rule changes from Canadian securities regulators
incorporating such standards.

Magna International Inc.

A-44

Magna International Inc.
337 Magna Drive
Aurora, Ontario
Canada L4G 7K1
Telephone: 905 726 2462