Delphi is bullish on the prospects for its after market business in Asia, particularly in India and China. Asia Pacific is forecasted to be the growth market for the global automotive industry in the next 15 years. Vehicle sales in Asia are projected to increase 55 percent in the next seven to eight years and vehicle production will increase 40 percent in the same time period. This surge will surely boost demand for automotive parts and components in the aftermarket. India is certainly one of our major markets in Asia, says Mr. Dominic Seto, Managing Director, DPSS-Asia Pacific.
Question: How is the growth of Delphi’s aftermarket business worldwide and how is the business, particularly in the Asian market which you are responsible for?
Answer: With the creation of the Delphi Product & Service Solutions’ (DPSS) aftermarket operations almost 7 years ago, Delphi’s OE heritage and technological expertise is available to the aftermarket worldwide. Every component that carries the Delphi aftermarket brand is developed and manufactured to the same high-quality standards expected by our OEM customer base, and benefits from the same rigorous engineering, research and development. This enables Delphi to be a leader in product performance using advanced materials and processes to achieve a longer product life and better operating characteristics. In less than 7 years, globally Delphi Product & Service Solutions’ aftermarket operations has gone from less than 10 product lines to more than 40; from a couple of hundred employees to more than 1,500 worldwide.
Asia Pacific is forecast to be the growth market for the global automotive industry in the next 15 years. Vehicle sales in Asia are projected to increase 55 per cent in the next seven to eight years and vehicle production will increase 40 per cent in the same time period. This surge will surely boost demand for automotive parts and components in the aftermarket.
As a world leader in automotive systems and components, Delphi is well-positioned to keep pace with this astounding growth rate. Delphi provides comprehensive product solutions to vehicle manufacturers globally. In fact, our presence in Asia stretches back nearly 30 years. During the period, we have established a manufacturing footprint that includes 15 wholly-owned companies and 19 joint ventures in 9 countries and six technical centers offering a wide-range of research and development capabilities to help global and local OEs compete in the region. We employ more than 13,000 people in Consolidated Operations.
Q: What is the kind of growth you are experiencing globally during the current year and how is growth in the Asian market?
A: Geographic Expansion, Channel Expansion and Product Line Extension are the key words for DPSS’ business growth in the current year.
* Delphi launched the aftermarket brand in East Europe (Poland), Canada, Mexico, Malaysia, Sri Lanka, Thailand.
* Delphi introduced its Delphi Service Centre programme in Europe, South America and Asia Pacific (Australia) this year. This new initiative helps ensure that independent garages are well positioned to meet the increasingly technical challenges they face and are able to benefit fully from opportunities in the service and repair market.
* Delphi is also continuously working on introducing more products to satisfy Asian customer needs.
Q: Specifically in Asia, the factors driving growth in the aftermarket? Which are the major markets for DPSS in Asia?
A: Asia Pacific is expected to be the growth market for the global automotive industry in the next 15 years. Vehicle sales in Asia are projected to increase 55 per cent in the next seven to eight years and vehicle production will increase 40 per cent in the same time period. This surge will surely boost demand for automotive parts and components in the aftermarket. India is certainly one of our major markets in Asia.
Q: Broadly can you give us a description of the product portfolio offered by DPSS? Are you looking at entering new product or service segments for growth?
A: At the stage DPSS’ product portfolio can be categorized into four major product lines:
* Vehicle Electronics – MRA, fuel pumps, oxygen sensors, ignition coils and fuel injectors, ECMs, ignition cable, EGR, etc.
* Thermal – HVAC components such as compressors, condensers, evaporators & radiators; Retrofit AC kits, driers, etc.
* Chassis – Shock absorbers, brake pads, caliper kits, steering column and half shaft and power steering pumps
* Consumer Electronics – car audio, portable navigation and overhead DVD players; And we’re also excited to announce the expansion of our diesel products into the aftermarket channel (Delphi Service Center)
Q: How important is the Indian aftermarket for DPSS globally? What is the kind of growth you are experiencing in India?
A: India is one of Delphi’s most important markets in Asia Pacific and DPSS first launched in India market in 2000. In terms of the growth, we expect significant long term growth in India giving the fact that the new car production is growing by 1.6 million per year, and the car population will expand to over 25 million by 2015. This will provide a significance aftermarket opportunity and Delphi is ready to expand our share in it.
Q: You launched the Delphi Service Centre concept in Equip Auto. Do you plan to replicate similar concepts in India as well?
A: Delphi Service Center will be a global format for service. India will be one of the first markets in Asia Pacific to conduct the concept. Delphi is evaluating the requirements for India market and also discussing with potential partners. We will launch the Delphi Service Center in near future.
Q: Automotive components are getting better in terms of quality, lasts for much longer time and due to better roads there is lesser wear and tear. This has in fact affected the after market business for many products. Do you see this seriously impacting your business?
A: India is growing market and the car population is expected to double between 2008 and 2015. Even with longer life and better quality parts, the overall demand for components will still be significantly higher.
Meanwhile, we are also supplying service and value-added products (AC kit, etc.) These products will be our additional source of revenue.
