Delphi 1Q15 Earnings Call Notes

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North America, Europe and China solid, weakness in Latin America

” Western European vehicle production appears to be gaining momentum, and vehicle production in North America and China remained solid, in line with our prior outlook.

The positive outlook for these regions is largely offsetting increased weakness in South America. Other macro factors are helping to counter a portion of the negative translation effect of the weaker euros.”

We bring technology and technology capabilities to the car

“We think at the end of the day what we bring to bear is technology and technology capabilities. And the more control, the more involvement in technology, the more value we add. The more integration of systems that we can do, the more value we add. So, our view is net-net that sort of trend would be a positive for suppliers like Delphi.”

Not too afraid of new entrants like goog or aapl

“Listen, you know, at the end of the day we think those of us who have been in the industry for a long time that have the capabilities, that understand the automobiles, that know how to integrate it, and do it at a quality level that the OEs need and require is very differentiated, and that is something the industry is going to continue to need.”

Chinese auto manufacturers are putting more content in their cars

No, listen, we came away from China as a management team very, very optimistic. And it’s really for two reasons. You know as a back drop to give you some background as you know we supplied both the global OEs there as well as the locals. A disproportionate amount of growth in that region has historically been with the global OEs on heavily content vehicles.

You’re absolutely right, the local OEs are starting to increase the quality and increase the content in their vehicle. And as a result appear to be strengthening. The positive for us is we have two things going on. On a relative basis you have strong vehicle production growth in the region. We have the benefit of serving both customer bases. The local OEs we actually do more systems work.

So dollar revenue and profitability tends to be greater when we serve those customers, which is beneficial. But what we are seeing is a significant ramp up in content per vehicle, and that’s what really explains the strong growth that we had in the first quarter, we were more than 10 points over market.”

There’s a fair amount of over capacity with OEMs

“I think everyone is familiar with this industry is aware that there is a fair amount of overcapacity among the OEs. Right, that is the reality. I think that’s something that the OEs need to ferret out, and figure out how they deal with it. ‘