Follow Road to Asia, Smaller Connected Cars or Perish, Visteon CEO Says

DETROIT – Visteon President and CEO Tim Leuliette says industry players looking to survive on the traditional strength of the U.S. market, or the types of vehicles it has historically produced, soon will meet grim consequences.

“The world has changed,” Leuliette tells a meeting of the National Assn. for Business Economics at a branch of the Federal Reserve Bank of Chicago here. “China is growing, Asia is growing, and that is where we are spending our money.”

The longtime industry executive, who leads the only remaining U.S.-based supplier of thermal-management systems and cockpit electronics, says some of the biggest OEMs no longer wield the dominant position they did just a few years ago and the power of influence has shifted from West to East.

General Motors, Ford and Fiat have watched their worldwide market share deteriorate by half in recent years, Leuliette offers, while former upstarts such as Hyundai have seen their piece of the global sales pie double. Toyota, Volkswagen and Renault/Nissan wrestle to hold share.

“Hyundai today is Visteon’s largest customer in the world,” he says of the former captive parts maker for Ford. “That’s how much the world has changed.”

The U.S. once accounted for 30% of light-vehicle production, but in the first quarter of this year it stood at 12%. Asia now boasts 53% of global production and China commands 26% of output after building just 3% of the world’s vehicles in 2000, according to Leuliette.

The epicenter of design and engineering has followed the production shift. Of the 12% of global vehicles built in the U.S., just 25% were designed and engineered in the region.

“It’s done elsewhere because the (other) markets are the dominant force,” he says, a factor driven by demand for small cars with greater fuel economy and fewer emissions. “The small car is the hotbed, the action place for the world, and at Visteon we chase those.”

Visteon also will continue to pursue a marriage between mobile devices and vehicles, as well as work on the autonomous-driving front. The first, he says, is driven by young people tethered to their smartphones and the second by global safety regulators seeking fewer vehicle crashes.

“If you don’t turn your car into a mobile device, you will die,” he says. “Seven years from now you won’t recognize your vehicle. There will be dynamics in the car you’ve never seen before.”

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