Delphi still confident despite slowing market
(XING BAO)
10/26/2001
China's market will not be affected by the September 11 terrorist attacks on the United States, according to J.T. Battenberg, chairman and chief executive of Delphi Automotive Systems Corp, the world's largest automotive supplier."China is very important to Delphi," said Battenberg, who was here to attend the Asia-Pacific Economic Co-operation CEO Summit 2001, which concluded on Sunday. "Delphi's operations in China are much broader than just manufacturing - exports are also part of our strategy," he said. Analysts forecast that automobile output in the Asia-Pacific region will slow next year due to the attacks, but that the projection for China will not change. "The business in China's market will stay with growth," said Battenberg. In the US, car makers have made a severe schedule reduction of components, "yet, in a short time, the reduction may generate short time sales, and the inventory may drop," he said. Entering the country in 1993, Delphi has been optimistic about China's huge and potential market and has increased its investment to $400 million. Among its 32 operations in the Asia-Pacific region, 13 are in China. Last year the company's sales reached $400 million in China, with a third coming from exports. Since its full separation from General Motors in 1999, Delphi has seen a decline in its GM business. In Battenberg's eyes, his company embraces the notion of losing GM business because it must have a more diverse customer portfolio. Last year, Delphi's non-GM business around the world amounted to $8.5 billion, and this year it is estimated to surpass $9 billion. "We will continue to grow non-GM business, and have multiple customers," he said. As the auto industry continues to consolidate, Delphi is developing new technology to increase its competence. It now has 16,000 engineers, with 6,000 electronics and software engineers. "We will work on innovation and launch 250 new products in the next four years," he said. The reasons for the surge in innovation throughout the supplier industry are obvious: electronics and the Internet are the most important forces in the auto industry. "How fast a driver can connect to the Internet will become almost as important as how fast a car can go from zero to 60," he said. Customers are becoming more demanding; they scrutinize the environmental impact and have higher safety demands than ever before. Delphi has joined with Qinghua University to form the Delphi-Tsinghua Automotive Systems Institute to train, educate and develop suppliers, employees and customers.
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