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5. Aptiv PLC (Formerly Delphi Automotive PLC) Business Report FY ended Dec. 2017

Aptiv PLC (Formerly Delphi Automotive PLC) Business Report FY ended Dec. 2017

Factors
1) Net Sales
-The Company’s net sales for the fiscal year ended December 31, 2017 increased by 5.0% over the previous year to USD 12,884 million. The increase in sales was primarily due to increased sales volumes in the Europe and Asia Pacific regions. These gains were partially offset by a sales volume decrease of 4% in the North America region.

Spin-off of Delphi Technologies

-On May 3, 2017, Delphi Automotive announced plans to spin-off its Powertrain Systems segment into a new publicly traded company. The tax-free transaction is expected to be completed by March 2018, after which shareholders will own shares in both companies. The Powertrain segment has 20,000 employees globally, including 5,000 engineers. The Electrical/Electronic Architecture and Electronics & Safety segments includes a total of 15,000 engineers and 145,000 global employees and focuses on computing, advanced safety systems, autonomous driving systems, infotainment and user experience, vehicle connectivity and electrification, and data services. (From a press release on May 3, 2017)

-Delphi Automotive announced that the companies formed as it spins off its powertrain segment and becomes two entities will have new names. Aptiv will concentrate on technology related to self-driving vehicles while Delphi Technologies will focus on powertrain development. Originally announced in May, the spinoff is expected to occur by March 2018. Aptiv will be comprised of the Company’s current electrical and electronic units and will develop safety components, software and vehicle computing platforms. Delphi Technology’s powertrain development will work with both internal combustion engines and electrified cars. Delphi’s current president and CEO, Kevin Clark, will be CEO of Aptiv. Liam Butterworth, currently senior vice president and president of the powertrain division, will be CEO of Delphi Technologies. (From Detroit News article on September 27, 2017)

-Delphi Automotive announced that its board of directors approved the record date, distribution date and distribution ratio for the spin-off of its Powertrain Systems segment into a new publicly traded company, Delphi Technologies. The spin-off is expected to be effective at the close of business on December 4, 2017. Following the spin-off, the Company will change its name to Aptiv. (From a press release on November 13, 2017)

-The Company announced that it, as Aptiv, has been launched as a technology company that develops safer, greener and more connected solutions for a diverse array of global customers. Formerly known as Delphi Automotive, the Company emerges from the completion of Delphi’s spin-off of its Powertrain Segment, which is now named Delphi Technologies. At the core of the Company’s capabilities is the software and vehicle architecture expertise that enables the advanced safety, automated driving, user experience, and connected services that support the future of mobility. Headquartered in Gillingham, England, the Company has 147,000 employees and operates 14 technical centers, as well as manufacturing sites and customer support centers, in 45 countries. The Company is expected to have revenue of USD 12.5 billion in 2017. (From a press release on December 5, 2017) (From a Detroit News article on December 5, 2017)

Acquisitions

-The Company announced that it will acquire Boston-based autonomous vehicle software company nuTonomy Inc. for USD 450 million to accelerate the Company’s development of self-driving vehicles. The Company will pay nuTonomy USD 400 million upon the closure of the transaction, and an additional USD 50 million in performance-based payments. The Company also recently acquired autonomous driving software developer Ottomatika as well as data service companies Control-Tec and Movimento. The Company plans to have 60 autonomous cars on the road across three continents by the end of 2017. The acquisition of nuTonomy was closed on November 21, 2017. (From Detroit News article on October 24, 2017) (From a press release on November 21, 2017)

-The Company announced that it has acquired Movimento, a leading provider of Over-the-Air software lifecycle and data management for the automotive sector. Its OTA capabilities provide end consumers the ease and convenience of software updates, allowing new features and functionality to be added to their vehicles instantaneously while reducing warranty and service costs for the vehicle manufacturer. Movimento will remain an independent entity within the Company, and will maintain its existing customer service model. The transaction closed on January 3, 2017. (From a press release on January 4, 2017)

Restructuring

-On December 30, 2016, the Northeast Industry Group acquired the Company’s mechanical project division in accordance with a contract signed on October 11, 2016, and set up Merit Automotive Electronic System Co. Ltd. The mechanical project division produces column switches, switch modules, and switches, with an annual production capacity of 30 million units. Currently, Merit Automotive employs 290 people including 50 engineers, and holds 261 patents in force. It is headquartered in Spain, operates an R&D center in Poland, and has five plants in Poland, Mexico, Brazil, and China. Its main customers include BMW, Daimler, Fiat, Ford, Jaguar Land Rover, General Motors, Peugeot Citroen, and Renault. (From a press release on January 23, 2017)

Business Partnership

-The Company announced that it has signed a commercial partnership agreement with BlackBerry to provide the operating system for its autonomous driving system. The Company and BlackBerry QNX will collaborate to bolster software performance and safety in their operating system to advance autonomous driving technology. The Company’s fully integrated, automated driving solution, Centralized Sensing Localization and Planning (CSLP), set to launch in 2019, will provide car manufacturers and Automated Mobility on Demand (AMoD) applications, a best in class turnkey automated driving solution. The BlackBerry QNX OS for Safety will facilitate the Company’s proprietary Ottomatika software algorithms and middleware, to enhance performance and safety. (From a press release on September 20, 2017)

-The Company signed a commercial partnership agreement with LeddarTech, a Canadian company developing solid-state LiDAR technology. To further support the commercial partnership, the Company has made a minority investment in LeddarTech. The two companies will collaborate to develop a low-cost, corner LiDAR solution that can be developed rapidly and allows for easy vehicle integration. LeddarTech sensors are used in multiple mobility-related markets, including automotive, intelligent transport systems, drones, and industrial vehicles. (From a press release on September 14, 2017)

-The Company announced that it has signed a commercial partnership agreement with Innoviz Technologies for LiDAR technology for the mass commercialization of autonomous vehicles. The Company has also made a minority investment in Innoviz to further support the partnership. Innoviz LiDAR technology utilizes a solid-state design to provide longer-range scanning performance and superior object detection and accuracy capabilities. Long-range LiDAR is critical for enabling Level 3 and Level 4 autonomous vehicles to travel at high speeds, as the vehicles will need to identify objects in great detail at long distances. Innoviz's proprietary LiDAR sensing solutions will be integrated into the Company’s systems to provide automakers with a comprehensive portfolio of autonomous technologies. (From a press release on August 18, 2017)

-The Company and Transdev announced a commercial partnership to develop a global, fully automated, mobility-on-demand (AMoD) transport system. The system will utilize Transdev’s Universal Routing Engine (URE) and the Centralized Sensing, Localization and Planning (CSLP) automated driving platform which the Company is developing in partnership with Mobileye. The Company and Transdev will start collaborating on pilot programs in Paris-Saclay and Rouen, France, as the first driverless, on-demand mobility service on an open road in the EU. Transdev is a transport operator which supports public transport authorities in activities including the pre-project phase, project management assistance and daily operation of public transport networks. (From a press release on June 7, 2017)

-The Company signed a commercial partnership agreement with otonomo, an Israeli company which develops a data marketplace for automakers. otonomo's connected car marketplace seamlessly and securely connects car data from any OEM to services and applications such as insurance companies, fleet transportation companies, vehicle repair services, emergency services and expense control apps. otonomo complements the Company’s existing data management capabilities of Control-Tec for data acquisition and Movimento for over-the-air updates. (From a press release on April 6, 2017)

Recent Developments

-The Company made a strategic investment in Valens, an Israeli company leading in signal processing capability, which is a key enabler for the expanding connectivity and computing needs in vehicles. Valens is the developer of HDBaseT, the global standard for transmission of ultra-high definition video, audio, Ethernet and data, as well as HDBaseT Automotive technology. The Company and Valens will be working closely together to advance solutions for in-vehicle connectivity based on HDBaseT Automotive and the Company’s technologies. (From a press release on April 6, 2017)

Contracts

-The Company announced an agreement with Great Wall Motor to supply of a series of its active safety solutions such as Intelligent Forward View systems, mid-range and short-range radars for the Chinese automaker’s next-generation SUVs. The products are to be supplied to Great Wall Motor from the Company’s plants in Suzhou, China, and Singapore. (From some releases on June 26, 2017)

Outlook

-In the fiscal year ending December 31, 2018, the Company expects to have sales between USD 13.4 and 13.8 billion, as well as an operating income between USD 1.69 and 1.77 billion.

-The Company expects to invest approximately USD 1.0 billion in research and development in the fiscal year ending December 31, 2018.

R&D Structure

-As of December 31, 2017, the Company has approximately 16,000 employees working in research and development.

R&D Facilities

-As of December 31, 2017, the Company has 14 major technical centers across the world:

• North America: 8 facilities
• Europe, Middle East and Africa: 2 facilities
• Asia Pacific: 4 facilities

-The Company announced the opening of a new technology center in Boston's Seaport district in the U.S. The new Boston facility joins technology centers in Pittsburgh, Pennsylvania and Mountain View, California. The Company selected Boston for its new technical center due to its technically proficient workforce, world-class universities, and the 'Go Boston 2030' technology initiative. nuTonomy, an autonomous vehicle start-up recently acquired by the Company, also recently launched an automated driving pilot program in the Boston Seaport district. (From a press release on December 12, 2017)

-The Company will expand its Delphi Electronics (Suzhou) Technical Center located in the Suzhou Industrial Park. A cornerstone laying ceremony was held for a new building on March 1, 2017. When the expansion is completed, the facility will span 8,000 square meters in area and accommodate a total of 800 engineers. The center will mainly develop infotainment systems, human-machine interface technologies, active safety systems, and body electronics systems. The technical center was established in 2014 and currently employs approximately 300 engineers. (From news releases issued by multiple sources on March 1, 2017)

Technological Alliance

-The Company and Autonavi Software Co., Ltd. signed an exclusive alliance agreement on the development of applied technologies in the areas of infotainment systems and autonomous driving for the Chinese market. The agreement covers the fields of big data, navigation systems, mobility services, and autonomous driving. The Company will use Autonavi Software’s maps to create new infotainment systems and IT-related services. According to the agreement, the Company will supply customers in China with autonomous driving services based on cloud end concept by combining Autonavi Software's autonomous driving map data, related software, and cloud calculation technologies. For future autonomous products, Autonavi Software will offer high-accuracy position recognition technologies. It also confirmed a plan to supply HD maps based on the position recognition technologies to the Company for other autonomous driving products. (From some releases on October 27, 2017)

-The Company formed a strategic agreement with high frequency connectivity company Rosenberger to enhance capabilities in high-speed data transmission. The two companies have agreed to engage in a technical partnership and will collaborate on high-performance, cost effective, high-speed Ethernet solutions for the transportation market. (From a press release on April 6, 2017)

-The Company, AT&T and Ford are developing new capabilities to enhance V2X communications. A jointly designed platform will be showcased at CES 2017. The Company developed the on-board V2X module for the platform. AT&T developed the software for the analytics platform and will provide wireless connectivity. Ford developed the in-car integration. Through the V2X platform, the nationwide AT&T LTE network would extend the range of Dedicated Short Range Communications. The platform uses the network to send notifications and updates for security credential management to each vehicle. The platform is designed to help vehicles communicate with each other and infrastructure to improve safety and vehicle security, reduce traffic congestion, save money and protect the environment. (From a press release on January 5, 2017)

Investments outside U.S.

-The Company’s UK-based subsidiary, HellermannTyton, recently started operations in its USD 10 million production facility in the municipality of Escobedo in Mexico. The 10,000-square-meter plant will expand to 20,000 square meters in 2018. The plant is dedicated to plastic injection moldings for the production of harnesses for automotive engine cables. (From a Mexico-Now article on April 10, 2017)


-On February 25, 2017, the Company Electrical/Electronic Architecture segment began construction of a new plant in Jingzhou, China. The plant will serve be the Company’s 13th wire harness plant and 19th facility in China. It will be built on approximately 74,100 square meters of land. Operations are scheduled to begin in October 2017. The plant will have the capacity to produce 400,000 sets of automotive wire harnesses per year and supply these products to customers in midwest China. (From news releases issued by multiple sources on February 28, 2017)