TRW Automotive says a resurgent US economy is aiding its performance, particularly with new products as the country bounces back from industry-wide turmoil only a few years ago.
“The North American market has been in strong recovery since the depths of the recession and the bad old days of 2009,” TRW executive vice president, sales and business development, Peter Lake, told just-auto on the sidelines of last week’s Auto Show in Detroit.
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“It is not up to the heady heights of 17m vehicles, but we are talking 15.5m units, that is a healthy market. We have enjoyed not only volume growth in North America, but beyond that have enjoyed the tail wind of new products. There is life after the death that took place.
“ESC systems [for example], even now we can see the emergence of camera type systems, that has been good for us [and] a lot of that growth is regulatory driven. Technologies in North America have matured later, but there are very high fitment rates.
“Maybe more of the powertrain and automotive safety technologies have been driven in Europe, but a lot of passive safety has been pioneered in North America, such as air bags. In North America, driving speeds are lower and traffic density is higher, so there are different colours of that basic theme of providing functionality.”
Latent US growth fuelled by pent-up demand as the “disequilibrium” of recent years bucked the market, is a clear opportunity for TRW, but so is the rapidly rising demand of emerging markets.
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By GlobalData“The next five years, there will be something like 20m more vehicles built per annum and more than 60% of these will be built in BRIC countries,” said Lake. “You must make sure you go where the growth is. TRW has invested unprecedented amounts of money to establish engineering support.
“We announced a year ago we would open another 11 manufacturing plants around the world and most of these were in China, Brazil [and] Mexico. We manufacture in the region for the region. But within the region we have choices where it makes sense to manufacture. Even China on the Eastern coast, is getting expensive.”
Regulation in North America continues to drive suppliers with passive safety credited with saving many lives, but TRW also highlighted its electric steering and ESC active systems as important.
“There are tremendous engineering possibilities to help you avoid an accident [such] as automatic braking,” said Lake. “It makes sense to have active safety. We work very closely with vehicle manufacturers and we are there as a partner to support them as they respond to those regulations. Realistically, TRW is the sort of company those [other] companies come to for solutions.
“There are so many things we can do – what is realistic to do? We have a technology road map that says when these things are likely to be fitted and when that is possible. We use the phrase ‘affordable safety,’ but it really reflects in everything we do.”
TRW said rising demand for its safety products and increased North American production helped boost Q3 net income in 2012 from US$158m to US$163m.
Revenue rose to US$3.97bn from US$3.92bn.
