This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.
$BWA Borg Warner
“as we look ahead, fuel economy and emissions improvements will remain the key objectives for automakers around the world”
“Throughout our history, our technology has competed against alternatives”
“Chinese domestic companies are going to get stronger and better and better, and I think they’re going to get a lot of support for that”
“I think the way to think about what the next technologies look like for us, first of all, each of the products that we have in the portfolio today are all enabling fuel economy and emissions performance across-the-board, every one of those products. And we see area for opportunity and advancements in all of those products, actually. So if I think of turbochargers to pick on an example, we see optimization in the turbo to help the automakers overcome such things as transient response, or turbo lag as some folks may know it. So we’ve got a bunch of examples going on there where we’re looking to use lighter materials, different types of materials. So there’s a whole stream of work around next generation of the products that we have today, and I could list those examples for — across every one of the products that we have. And that’s a big, big part of the work that we do. But the other part of the work that we do, and that’s kind of part of the BorgWarner DNA, is what’s the next thing that’s not in our portfolio, and we approach that both organically as well as through M&A. So we’re looking at what the powertrain may look like 10 years, 12 years, 15 years. We have a Chief Technology Officer, a team of people that are dedicated to — that’s what they do. And that may come externally where we may see a technology that isn’t in play today but will be in a decade”
“The way we interact with the customer is almost always as a system-type approach. But what leads us to the solution with the automaker is our system know-how. Absolutely, our engine system know-how or our clutching and control systems know-how. And integral to that know-how is a tremendous amount of sophistication that we have inside the company about understanding engine and transmissions as a complete system.”
$TRW TRW Automotive
“we’re big, we’re global. We have over 65,000 employees around the world. There is usually not a platform or a car that you can name where we don’t have some kind of content on”
“there’s no one platform, no one product, no one customer that is hugely material to the company, and that speaks to the defensive nature of our business.”
“We do feel that there’s pent-up demand building in Europe. We do think that the normalized level is something more in the 20.5 million to 21 million zone.”
“over many years, it’s gone from a component base to a systems base to an integration.”
“We go through ups and downs, be it the downturn of ’08, ’09, the investment phase that we’re going through now, commodity spikes. But at the end of it, we always generate cash…Two worst years in the history of the auto industry, ’08, ’09, we generated $545 million in those 2 years. And this is something that we highly focus on in the company”
“Yes. We are making money in Europe at these levels. I think at 18.4 million vehicles being produced this year, that’s well above our breakeven. You’d have to get down into the 17 million, sub-17 millions before there’s any concern or worry.”
$DLPH Delphi
“The pace of change in the automotive industry, well, it’s accelerating…global platforms have become a reality. By 2020, they will represent over 1/2 of the global vehicle build.”
“China isn’t the only area that we’re seeing massive change, stricter fuel economy. And emission standards are taking hold worldwide. And consumers are demanding to be connected from the car.”
“we do have the industry’s leanest cost structure.”
“Delphi is a very large and a very complex company that earns the trust of our customers through outstanding, flawless execution…we purchase 0.25 billion parts every day from 6,400 supplier locations. Our 110,000 people in our 141 global facilities deliver 60 million parts every day at quality levels of less than 2 rejected parts per million and with on-time delivery of 99.5%”
“We believe the role of the Tier 1 supplier is becoming increasingly more important. OEMs rely on system integrators like ourselves. And there are only a few Tier 1 suppliers like us that are focused on innovation and even fewer that can execute globally like we do”
“there’s a long list of consumer electronic companies that’s at the top of the game and the connectivity technology. But being able to make that technology, automotive grade and make it work in a car, then that’s a different story, and that’s where we come in at Delphi. Those companies don’t know cars like we do, so we work very closely with companies like Microsoft, NVIDIA and Google”
“we’re a very high-tech company with very special products, and there’s an extra amount of percent of vehicles on the planet that will not utilize ours, particularly, a lot of the entry-level emerging market types of vehicles. They’re not heavily contented in our space, and we do not try to engineer down into that. So there’s probably 35% to 40% on the vehicles that we don’t want to be on because they won’t generate the kind of value that we want to generate, and we don’t plan on taking our technologies and trying to cheapen them, and brand them down to meet into that space. In addition to that, we don’t — we only have about 5% of our business with the Japanese OEs.”
“[on how to achieve fuel efficiency] much improved conventional Powertrain through technology improvement, it will lead the way, it will be the majority of what you see in d vehicle fleet followed by the hybrid and the plug-in and then the EV…when we look at our content for vehicle, it’s actually higher on the electrified vehicle than it is on the conventional vehicle.”
$GPI Group 1 Automotive
“we’re the fourth largest dealership group in the U.S. Last year, we retailed a little bit over 128,000 new vehicles, about 85,000 used vehicles”
“We’re currently up to 142 dealerships, representing over 180 franchises, we have 36 collision centers…we added 18 dealerships in Brazil.”
“brand mix has always been very dominant with Toyota and Lexus, it’s still about 30% of our company. And then you can see Nissan and Honda and BMW and MINI, all around 11%; and Ford, a significant part of our business at a little less than 10%. You can also see that Texas, California and Massachusetts are our primary geographies, and the U.K. showing up there at about 6%, but I expect will continue to grow.”
“While Only 12% of our revenue, our Parts & Service business generates 42% of our profit. Finance and Insurance business also is disproportionate in its contribution to our profit level, 4% of revenues generate 23% of our gross profit. So although a vast majority of our revenues, 57%, come from selling new vehicles, only a little more than 1/5 of our profit comes from that.”
“We continue to see great potential for growth in the U.S. market in the next few years as well. However, still a lot of pent-up demand, the age of the car park is as old as it’s ever been, near 11 years. The number of licensed vehicle drivers is on the rise. Financing is widely available in the market. And used vehicle prices, although they’ve softened recently, are still very strong, which helps consumers trade their vehicles.”
“And as new vehicles trailed off during the recession, our best source of inventory, if you will, is the trade when somebody comes to buy a new vehicle and that fell off as the new vehicle sales fell. We got down to a low of about 50% of our used vehicles being sourced via trade-in, where kind of prior to the recession, we were running about 70%. That puts some downward pressure on our margins…we have to go to auction to source cars. We’re paying $500 to $1,000 more kind of for a similar vehicle. You got auction fees, you got transportation cost, and you’re ultimately bidding against other dealers. So it’s a more expensive place to pick up inventory, so we think there’s opportunities going forward there.”
“the productivity of salespeople over the last decade, or maybe it was even longer than a decade, hadn’t really improved much while you’re selling 8 to 10 cars per month per salesperson. And we’ve got to find a way to change that.”
$HTZ Hertz
“$9 billion of revenue. You can see that a little over 84% of that is in the rental car space…equipment rental business is a $1.4 billion business”
“we’ve really focused over the last couple of years in becoming experts in the used car market. if we can sell a car directly to a dealer, we can make $500 more per car by eliminating that wholesale channel. That’s really the fees that you pay to the wholesaler. And if we can sell directly to the retail channel, there we can make $1,100 more per car”
