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Delphi Automotive Splits in Two

February 4, 2018

Delphi Automotive Splits in Two

Delphi Automotive has long been one of the top global technology suppliers on the consumer and commercial vehicle market. In December of 2017, Delphi Automotive PLC announced it had completed its split into two different companies. The Powertrain group will be known as Delphi Technologies. It is an independent $4.5 billion dollar company that has begun trading on the New York Stock Exchange. (NYSE) as DLPH. A wide contrast of Delphi consumers across the globe appreciate this company’s connected electronics and how it handles safety problems. Delphi Automotive remains committed to these goals and will now continue as Aptiv (APTV).

With 5,000 engineers, a legacy of creating sophisticated propulsion solutions via combustion systems, and product electrification for drivers all over the globe, Delphi Technologies has a strong foundation to grow from. Liam Butterworth, the new CEO at Delphi Technologies, says that their 20 manufacturing facilities and 12 technical centers over 3 continents are helping them to reach full electrification, an effective cost structure, and a balanced manufacturing footprint. 

Delphi Technologies brings many strengths to the table in this competitive market. It has a balanced mix of revenue, a strong cost structure, and is headed by veteran leaders. Delphi Technologies is also well-versed and compliant with the growing strict auto regulations regarding the lowering of CO2 and additional toxic auto emissions from combustion engines. This company will focus on electric vehicle components, combustion engine parts, and software controls. By 2020, it is expected that Delphi Technologies will have an operating income of at least $700 million. 

The new Aptiv Company is well positioned to tackle the complex challenges that come with striving for transportation that is greener, more connected, and safer. They have expertise in software and vehicle architecture that will help them improve automate driving, and user-friendly driving and riding experience, and services that are more connected. Aptiv's focus will be on the electrical frame of vehicles, autonomous cars, and electronic safety technology. It is predicted that Aptiv will grow faster than the auto market and that by the year 2020 it will have an operating cash flow of $2 billion to $2.5 billion. 

The splitting of Delphi Automotive was done in order to help Delphi’s valuation. The split allows each company to focus on a specific area of the market; the profitable but slowly growing legacy of the Delphi business and the technology and growth potential of new innovations. 

In fact, the Swedish auto supply company Autoliv (ALV) is thinking about a similar split for their company. One company would focus on the legacy of the business; airbags and seat belts. While the other new company, similar to Aptiv, would focus on advanced driver-assist systems and efforts to support self-driving vehicles.

Tags: Delphi , Aptiv