Are you crazy? is a question Joseph Griffin is getting tired of answering.

No, the engineering manager for Magna International's Decoma Exterior Systems does not belong in a straightjacket, and yes, his company is serious about entering the exterior lighting market, first in North America, then going global later on.

The response from some automotive executives to the idea has less to do with Decoma's supplier capability than with the overall exterior lighting market, which already is saturated with players both large and small. Among them: Delphi, Ford's Visteon, Osram Sylvania, Bosch, Valeo and Hella, just to name the biggies.

There are several reasons to question why Decoma would enter the exterior lighting market: profit margins are low, the price of admission is high, and the competition is fierce.

But Mr. Griffin says the answer is quite simple: Lighting is the only missing piece in the exterior systems business for Decoma, which already supplies front and rear bumper systems, spoilers, grilles and bumper fascias, not to mention a host of other exterior systems.

Decoma buys hundreds of lights a day from other suppliers to incorporate in many of its exterior assemblies. Decoma wants to supply those lights, or acquire a company to do so, Mr. Griffin says.

Canada-based Magna, which has six divisions supplying parts for practically every facet of automotive production, already does some lighting work, but it's limited mainly to lens coating. Decoma wants to start out making taillamps, fog lamps, turn signals and center high-mounted stop lamps (CHMSLs), then move later into headlamps.

"We've been investigating it for a year, and we continue to do so now," he says. "We're not looking for a partner because we need to be in lighting tomorrow. But there is a benefit to being in lighting soon."

Decoma is entering the lighting business as the market moves from incandescent to neon or light-emitting diode (LED) technology. The company is directing its efforts toward LED. Here's why:

LEDs, each one measuring about a quarter-inch square, provide significant space and weight savings over contemporary incandescent lights. A rear taillight assembly could measure 7 to 8 ins. (18 to 20 cm) in depth, but the same package with LED could be as thin as 2 ins. (5 cm), saving considerable trunk space, Mr. Griffin says.

And without a filament, the LED will last longer than the vehicle itself, making replacement a thing of the past. While an incandescent bulb takes about a quarter-second to light up, an LED lights up instantly, providing about 20 ft. (6.1 m) of extra braking room for a vehicle traveling at 60 mph (96 km/h). LEDs also are four times brighter than they were just a few years ago.

While LEDs may be more expensive, the cost is nearly offset by savings in vehicle construction, energy use and warranty costs, Mr. Griffin says.

Applications for turn signals and rear combination lamps are ideal, but LEDs are mainly used for CHMSLs in passenger vehicles today. They are used in some rear combination lamps for heavy trucks.

Decoma displayed some of its LED lighting concepts for Chrysler Corp. officials in mid-August - as well as for other automotive executives - and the response has been favorable.

One of Decoma's mockups was a taillight assembly for a Dodge Viper offering several different flashing patterns for the activated turn signal. In the future, LEDs could even be programmed to spell out words, perhaps a distress signal in times of trouble.

While some suppliers move toward LED, Osram Sylvania is leaning toward neon. George English, the company's director of automotive lighting, says neon offers softer, more even lighting that is not only pleasing to the eye but brighter.

Several years ago, Osram Sylvania worked with the U.S. Coast Guard in developing a new buoy with solar-powered lighting. The company considered LED but found it didn't generate enough light, Mr. English says.

He agrees with Mr. Griffin that LEDs are becoming brighter, but says the problem with LEDs in automotive applications is that they appear as specks of light, which can cause glare for trailing motorists.

"You have to spread out the light because people don't want to have a lot of points of lights looking at them," Mr. English says. "In general, you want a band of light that is uniform and nice and silky to look at and not full of a lot of hot bright spots. That's why we like neon."

Although neon costs a little more than LED, Osram Sylvania is finding plenty of OEM interest in it.

The company continues supplying a neon rear applique with a brake light function for the Lincoln Mark VIII, and the company has other work for neon CHMSLs or rear combination lamps in the next few years. One of those vehicles will be on the road within six months, says Tom Shottes, Osram Sylvania's senior product manager.

Still other suppliers, such as German-based Hella, are moving in the direction of LEDs. Hella conducted three studies based on the combination rear lamps of the new Audi A6 and found considerable savings in space and power consumption.

In addition, Hella found, LEDs offer a lot of design options and contributes to a more rigid body because the opening for lights can be smaller with LEDs.