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. 
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.
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.
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%. With new proposed incentives and tax breaks for hybrid car owners, demand is going to continue to increase. With more hybrids, Lear will be able to sell its high-power electrical systems and components.