Delphi Sees China’s Demand for Connected Cars Driving Growth

China’s demand for Internet-connected cars could drive Delphi Automotive Plc’s revenue growth in the Asia-Pacific region, the company said.

The supplier of car electronics is working to develop Internet connectivity options that don’t distract drivers, Chief Technology Officer Jeffrey Owens said in an interview in Shanghai. Delphi is working on features such as reconfigurable displays and higher computing power, he said.

Automakers from Nissan Motor Co. to Dongfeng Motor Group Co. plan to introduce connected vehicles to woo younger customers in the world’s largest car market. The average age of car buyers in China is 33, the lowest among major markets, according to researcher JD Power & Associates, and the growing purchasing power of this demographic group is attracting carmakers’ attention.

“The younger demographic is more about the user experience,” Owens said on Friday. “The battleground for the millennial is the user experience, and less so about styling or horse power.”

Revenue from the Asia-Pacific region will probably rise to 28 percent of Delphi’s total by 2017 from 23 percent last year, Owens said. The company aims to maintain revenue growth in China, its fastest-growing market, at a pace about 10 percent faster than industrywide vehicle output in the country, he said.

Acquisition Plans

Owens reiterated that Delphi, which provides technology for companies including Volkswagen AG’s Audi, is looking for acquisitions. Chief Executive Officer Kevin Clark said earlier this month that the company would consider a purchase of as much as $2 billion in value.

“We’ve got the balance sheet, we’ve got the capability to be able to look at some significant M&A activity,” Owens said. “You’ll hear some things coming this year.”

The auto components maker is scouting for targets at a time when acquisitions may be intensifying. As many as 70 percent of the automotive companies surveyed by Ernst & Young LLP intend to pursue deals in the next 12 months. That’s the highest level in the survey’s six-year history, E&Y said this month.

— With assistance by Alexandra Ho

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