Lear, which boasts it’s the global leader in automotive seating, won’t relinquish that position, but it also sees robust opportunities in its electronics-systems business.
That’s how Matthew Simoncini, Lear president and CEO, assesses the company’s outlook at the recent CAR Management Briefing Seminars in Traverse City, MI.
Lear’s seating revenues reached $14.4 billion in 2016 while electronics accounted for $4.2 billion, he says.
Simoncini says a convergence is at hand between traditional automotive manufacturing and advancing technology including connected vehicles, fully autonomous vehicles, alternative powertrains and mobility solutions.
In prepared remarks, Simoncini differentiates between the automotive and technology industries. While automotive “makes things,” for example, the tech side “invents things.” Automotive produces “low margins” vs. “margins” and has “long product cycles” vs. “short product cycles.”
“We’re baked in during the next three to five years, but we’re designing out seven to 15 years,” he says, clearly expecting Lear to participate in the technical revolution. “We have junction boxes and other components plus software to support autonomous vehicles, but I don’t know what this volume will be.”
Simoncini says the traditional automotive industry is a high-risk, high-capital business with low-profit returns. “We want to change the view from rust belt” to high tech, he says.
Although Lear clearly is preparing to become a supplier of electronic components and software, it is not overlooking growth in its core seating business. “We’re going to torture you guys,” he jokes, presumably addressing Lear’s competitors in his audience.
Lear is pushing ahead, for example, with what Simoncini calls “intelligent seating” that’s safer and more comfortable. One effort is seating that collects the passenger’s health data and can be personalized using a smartphone. “We want to say, ‘Look how happy he is in a Lear seat,’” he quips.
