Apple Supplier Flextronics Boosts Focus on Automakers for Growth
Flextronics International Ltd. (FLEX), a supplier of cameras and battery charges to Apple Inc. (AAPL), is seeking Chinese, Japanese and Korean car makers as customers to boost growth in its automotive business.
The Singapore-based company aims to double its revenue from the High Reliability Solutions group, which includes automotive, medical, aerospace and defense, every three to five years, Paul Humphries, president of the division, said in an interview in Shanghai today. Sales for each business are expected to increase between 10 percent and 20 percent annually, he said.
Flextronics, which also makes lighting and entertainment systems for automakers, is increasing focus on Asian car makers after its revenue declined for five straight quarters. Total vehicle sales in China this year are forecast by the country’s industry group to surpass 20 million units for the first time.
“We need to have a greater presence in China, supporting the Chinese manufacturers,” said Humphries. “The automotive business has been the fastest growing of the businesses within the High Reliability Solutions group.”
The division accounts for about 12 percent of Flextronics’ business, according to a company presentation this month. The auto segment contributed revenue of $1.1 billion in the year ended March 2012, out of total sales of $30 billion, the company said.
Of the company’s four biggest divisions, the HRS group is the only one that posted a growth in the quarter ended December from a year earlier, according to data compiled by Bloomberg. Flextronics gets 37 percent of its total revenue from China, its biggest market, the data showed.
Wholesale deliveries of autos in China, including those of cars and buses, may increase 7 percent this year to 20.65 million units, led by demand for passenger vehicles, the state- backed China Association of Automobile Manufacturers said in January.
To contact the editor responsible for this story: Young-Sam Cho at firstname.lastname@example.org