Auto Parts Maker Delphi Eyes New Industries To Conquer

By Agence France-Presse Auto parts maker Delphi Corp. said July 10 it is expanding into new fields such as medical, aerospace and electronics to limit its exposure to the volatile car industry. The move, coupled with surging demand for vehicles in China and across the rest of Asia, would enable the U.S.-based giant to generate half of its revenue from outside former parent General Motors (GM) Corp. by around 2006, President and CEO J.T. Battenberg told a news conference in Tokyo. "The automotive industry is traditionally a sector prone to high sales peaks and deep troughs . . . remaining stuck in this cyclicality is what we are working aggressively to change," Battenberg said. "Delphi's depth of technology . . . core capabilities and . . . intellectual property can be and should be leveraged into new applications, new market segments and new industries and we are beginning to do so." For example, certain products used in automotives could also be used in medical equipment, electronics and aerospace devices, he explained. Commercial vehicles, which include trucks and buses, is another area where Troy, Mich.-based Delphi could apply its patents and technology. "In just five years we have already tripled our sales in this industry and the pipeline continues to fill with new business," the chief executive said. "In the first six months of this year we have already surpassed my full year goal of $1.5 billion in new business bookings in commercial vehicles." While venturing into different areas, Battenberg said Delphi remains committed to strengthening its grip on the auto parts industry by boosting business with companies unrelated to former shareholder GM. The pair broke ties in 1999 when Delphi became independent. During the first quarter of 2003, 37% of Delphi's worldwide sales came from outside GM -- up 7.4% from the same period a year earlier. "We are aiming at 39.5% for 2003 and in two and a half years we are looking at 50%," said Battenberg. "A lot of growth will come from the Asia-Pacific region where 92% of [the] business is non-GM and a lot of growth will come from Europe where a majority of our business is non-GM." Copyright Agence France-Presse, 2003