Automotive News
VAN BUREN TOWNSHIP, MI — Visteon Corp. has landed a lucrative — and potentially more lucrative — contract to supply instrument panel modules to Honda Motor Co. in North America .
Visteon, which was forced to seek a financial bailout from Ford Motor Co. this year, is moving deeper into business dealings with Honda, an automaker renowned for its stern scrutiny of suppliers.
Visteon will begin supplying the next-generation Acura MDX with the modules in 2007 in a contract that one industry forecasting firm estimates to be worth $30 million a year.
The award also puts Visteon into an auspicious position: The MDX SUV platform is shared by the big-volume Honda Pilot SUV. Honda will begin awarding supplier contracts for that nameplate’s next generation later this year.
While the MDX is on track for sales of about 70,000 a year, the Pilot is being forecast for 2008 model-year sales of 190,000 a year, according to CSM Worldwide, the Farmington Hills, Mich., forecasting firm. That’s up from 128,158 U.S. sales in 2004.
A spokesman for Honda of America Manufacturing Inc. in Marysville , Ohio , which manages North American purchasing, declined to comment on future MDX plans or to discuss what will become of the suppliers to the current program.
Visteon’s module is part of an interior redesign and may combine parts currently supplied by Nippon Seiki Co. Ltd. of Japan and Intertec Systems LLC. Intertec is a North American 50-50 joint venture between Johnson Controls Inc. and Inoac Corp. of Japan . The Visteon component also may displace content currently made in-house by Honda.
Honda business is not new for Visteon. The Van Buren Township, Mich., company also supplies instrument cluster modules to the Honda Accord, which is built in Ohio . But the expansion of business is an indication that the parts giant is far from down and out.
In May, Visteon unloaded 24 unprofitable factories and technical operations onto Ford, the company that spun it off in 2000. The move shrinks Visteon’s annual revenue from $18.9 billion to $11.4 billion.
Visteon could become profitable in 2006, says John Casesa, a Merrill Lynch analyst in New York . The company posted combined losses of $3.2 billion from 2000 through the first quarter of 2005.
Paul Haelterman, CSM’s director of market assessment, believes Visteon stands to gain ground in the coming months, specifically in the instrument cluster and cockpit business.
“People seem to be missing the fact that Visteon is a damn good cockpit supplier,” Haelterman said. “They’re one of the few companies in the segment that can extend their resources globally. They can operate on programs in North America , Asia and Europe at the same time.”
As far as other opportunity in the segment, Visteon is watching as Collins & Aikman Corp., its closest cockpit component competitor, claws its way through an uncertain bankruptcy. Collins & Aikman of Troy , Mich. , supplies approximately half of the instrument panel modules used by DaimlerChrysler and holds a 19 percent share of the North American market, according to CSM numbers.
CSM ranks Visteon No. 1 in the segment, with a 24 percent share of North America ‘s cockpit market, based on the number of units.
Collins & Aikman filed for Chapter 11 bankruptcy protection in May and is currently re-examining existing contracts.
2005 Automotive News. All Rights Reserved.
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