EUR 850.00 For Business Accounts Only

Morningstar | DLPH Updated Forecasts and Estimates from 02 Apr 2019

We expect Delphi Technologies’ average yearly revenue growth to exceed average annual growth in global light-vehicle demand by 1-3 percentage points. The company supplies components and systems that make engines more fuel-efficient, supporting its passenger and commercial vehicle original-equipment manufacturer customers’ need to meet increasing legislated clean air standards around the world. OEM products include fuel injection systems, actuators, valvetrain products, sensors, electronic control modules, and power electronics technologies.Delphi also has an aftermarket parts business. Aftermarket products sold to independent retailers and wholesale distributors include engine control modules, pumps, injectors, fuel modules, ignition coils, smart remote actuators, exhaust gas recirculation valves, brakes, steering, and suspension products. Aftermarket automotive parts tend to be a less cyclical business than original equipment parts. However, aftermarket is not immune from cycle turns as budget-sensitive consumers postpone some repairs if economic conditions deteriorate.In our opinion, Delphi’s ability to regularly innovate and commercialize new technologies bolsters sales growth and return on investment. A global manufacturing presence enables the company to serve customers around the world, 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 enables more favorable operating leverage as volume increases.Delphi enjoys relatively sticky market shares supported by integral customer relationships and long-term contracts. The design phase of a vehicle program can last between 18 months and 3 years, depending on the complexity and extent of the model redesign. The production phase averages 5-10 years. Engineering and design for the types of products Delphi supplies necessitates highly integrated, long-term customer relationships, not easily broken by competitors' attempts at market penetration.