The world´s leading tier one automotive supplier, US-based Delphi Automotive Systems (HQ: Troy, Michigan; www.delphiautomotive.com) recorded a slight decrease in sales to USD 29.14 bn in fiscal year 2000 (USD 29.19 bn in 1999). At the same time, however, net income of the former General Motors subsidiary eased forward to USD 1.1 bn, yielding a net income margin of 3.8 % (3.7 %).

Delphi´s CEO, J.B. Battenberg III, attributes the slight decline in 2000 to “a sharp and unexpected drop in fourth quarter revenues, resulting from the rapid deterioration of North American vehicle sales volumes.” The fact that Q4 earnings slipped back only 5 % was due to the company´s success in “moderating the impact of the rapid fourth quarter order decline through aggressive inventory management, workforce adjustments and other cost reduction initiatives,” said the CEO.

The company´s Safety, Thermal and Electrical Architecture business segment, which includes, among other vehicle interior products, door and front end modules, saw its sales fall to USD 10 bn in 2000 from USD 10.5 bn in 1999. Operating cash flow totalled USD 1.6 bn. The former GM offshoot increased sales to external customers by 20 %. These accounted for a record 29 % of total sales, around USD 8.4bn.

Despite the fact that 2001 is expected to be challenging for the entire automotive industry, as volumes are anticipated to decline industry-wide, Battenberg expressed “cautious” optimism that Delphi will have “another good year”. The company plans to reduce structural costs. For the first quarter, sales of around USD 6.5 bn are projected, along with net income of USD 120m.