QUOTE AND NEWS
SeekingAlpha  Aug 10  Comment 
New York Times  Aug 3  Comment 
The awardees, including Norman Lear, Gloria Estefan and LL Cool J, appear to be divided on how best to respond to the honor.
SeekingAlpha  Jul 27  Comment 
The Hindu Business Line  Jun 24  Comment 
A CPI(M) delegation met the family members of 15-year old Junaid, who was lynched by a mob on Thursday while he was travelling on a local train to Mathura from Delhi with his relatives. CPI(M) lea...
Benzinga  Jun 8  Comment 
Lear Corporation (NYSE: LEA) was downgraded by Morgan Stanley analyst Adam Jones from Equal Weight to Underweight, with a price target reduction of about 10 percent to $134. The analyst’s 2017 EPS remained unchanged, but EPS estimates for 2018...
Motley Fool  Jun 8  Comment 
Morgan Stanley's Lear downgrade could be only the beginning.
New York Times  May 26  Comment 
Mr. Perenchio promoted the first Ali-Frazier fight, produced television shows with Norman Lear and turned Univision into the dominant Hispanic TV network in the United States.




 

Introduction

Lear (NYSE: LEA) is one of the largest independent automotive parts suppliers in the world, with a 9% global share. It is among the leading providers of seating and electrical distribution systems to the automotive industry. The company is in the third position both in North America and the world in these product lines. The company has operations in 33 countries. Sales are 55% in North America, 39% in Europe and the rest in other areas. About 55% of sales are in automobiles, while 45% of sales are in trucks. The company has 65% OEM exposure.

The company conducts its business in the following segments: Seating, which includes seating systems and related components (79% of sales) and Electronic and Electrical (21% of sales), which supplies distribution systems, such as wire harnesses and wireless systems. As a leading integrator of complete automotive systems, LEA seeks to benefit from the trend toward outsourcing, as well as from increasing electronic content in vehicles. [1]

Business Growth

Lear is targeting BRIC markets of Brazil, Russia, India, and China for growth. For the seating segment, Lear is looking to develop low cost and standardized seat structures that can be modified for each region. From 2009 to 2010, volume increased by 30% in China, 32% in India, and 95% in Russia. The Electronic and Electrical segment is looking to expand manufacturing capabilities in these regions for additional supply. Currently 90% of their headcount is in 32 facilities in 14 low cost countries.

Trends & Forces

Declining United States Automotive Industry

The US automotive industry was drastically affected in 2008 and 2009, which followed a general decline starting in 2006. In 2009, with the lowest domestic selling rate seen in decades, each of the “Big Three” U.S. automakers requested emergency loans. GM and Chrysler went bankrupt. Although they have come out of bankruptcy and auto sales are picking up, consumer demand could be weakened by rising fuel and energy costs. Weakness in the economic recovery may also cause another drop in demand. With sales driven by the number of vehicles produced by the automotive manufacturers, Lear is heavily tied to the automotive industry.

Growth of Hybrid Vehicles

With fuel prices on the uptrend again, sales of hybrid cars are growing, following downturn in 2009. The number of hybrids are growing at around a steady 28%.[2] With new proposed incentives and tax breaks for hybrid car owners, demand is going to continue to increase.[3] With more hybrids, Lear will be able to sell its high-power electrical systems and components.


Competition

  • Johnson Controls provides automotive interiors, optimizes energy use in buildings, and provides batteries for automobiles and hybrid electric vehicles.
  • Visteon Corporation (VC) provides climate, interiors and electronics systems, modules and components to automotive original equipment manufacturers (OEMs) worldwide.
  • Gentex (GNTX) designs, develops, manufactures and markets products employing electro-optic technology: automatic-dimming rearview automotive mirrors with electronic features and fire protection products.





Notes

  1. LEA Annual Report 2010
  2. Hybrid Car Sales Figures
  3. Hybrid Car Tax Credits
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