Delphi Automotive 3Q16 Earnings Call Notes

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Delphi Automotive Plc (DLPH) Q3 2016 Results
Kevin Clark

Megatrends are safe green and connected

“Turning to slide six, the automotive industry’s transformation has been the theme at each of this year’s major auto shows with the highway seeing the megatrends of Safe, Green and Connected, which are at the heart of our strategy. The theme of the recent commercial vehicle show in Hannover was around new mobility. I met with a number of customers who are looking to Delphi to help solve some of their toughest challenges resulting from these megatrends”

25% – 30% of vehicles will be electrified by 2020

“at the Paris Auto Show, vehicle electrification was front and center, as customers look to close regulatory gaps on CO2 emissions and improve fuel economy. Industry experts and even some of our customers are now forecasting 25% to 30% of vehicles to be electrified by 2025”

At level 3 autonomous you get 80% of the benefit for 20% of the cost

” We look at automated driving as on the spectrum of active safety. And the reality is if you get to level 3 automated driving, you get 80% of the safety benefit at 20% of the cost, right?…Yeah, couple thousand dollars. So, listen, a lot of benefit can be really derived there. As you look at going from level 3 to level 4 or level 5, level 5 especially, we see the initial demand being primarily driven by the mobility providers, the folks that you are familiar with, who have another economic incentive to have a driver out of a car and for it to be fully autonomous. Now, there are additional OEs who are working on fully automated vehicles as well for a number of other reasons. But I think that’s a great question and our view is yeah, at level 3 you get 80% of the benefit at 20% of the cost.”

There could be Level IV and level V autonomous systems on vehicles before 2021

” I think given the dialogues we’re having with select customers, they could have them in their vehicles close to 2019 or before 2021, put it that way, given some of the dialogues we’re working. So in terms of pulling it forward, obviously, what’s critical is that our partnership begins working with OE sooner rather than later to integrate that. ”

Joseph Massaro

Expecting flat vehicle growth next year

“we believe global vehicle production for next year will be flat to 2016 levels. However, with our strong portfolio of relevant technologies, we would expect Delphi to grow mid-single digit organic, driven by our faster growing product lines, active safety, infotainment, GDi and vehicle electrification, all of which are expected to grow strong double digits again in 2017.”