EUR 850.00 For Business Accounts Only

Morningstar | Aptiv Positioned for Growth in Vehicular Electronics Content and Autonomous Driving Technologies

We expect Aptiv's average yearly revenue growth to exceed average annual growth in global light vehicle demand by 4-6 percentage points. The company provides automakers with components and systems that are in high demand from consumers and that government regulation requires to be installed. Aptiv's high growth technologies include advanced driver assist systems, or ADAS; autonomous driving, or AD; connectivity; data services; and high-voltage electrical distribution systems for hybrids and battery electric vehicles.In our opinion, Aptiv’s ability to regularly innovate and commercialize new technologies bolsters sales growth and return on investment. A global manufacturing presence enables Aptiv to serve customers around the globe, capitalizing on the economies of scale inherent in automakers' plans to use more global vehicle platforms. Lean manufacturing discipline and a low-cost country footprint enable more favorable operating leverage as volume increases.Aptiv enjoys relatively sticky market share, supported by integral customer relationships and long-term contracts. The design phase of a vehicle program can last between 18 months and three years depending on the complexity and extent of the model redesign. Production phase averages between five and 10 years. Engineering and design for the types of products that Aptiv provides necessitate highly integrated, long-term customer relationships that are not easily broken by competitors' attempts at market penetration.New Car Assessment Programs are used by governments around the world to provide an independent vehicle safety rating. Legislators, especially in the U.S. and in Europe, have set NCAP guidelines that will progressively require the addition of autonomous driving features as standard equipment through the end of this decade. If automakers intend certain models to achieve a 4- or 5-star safety rating, some ADAS features must be part of that vehicle's standard equipment to even qualify for certain rating levels.