FRANKFURT - Mannesmann VDO AG expects its cockpit module business to accelerate in the next year as it launches several new projects.
Chief Executive Peter Grafoner says Mannesmann VDO is leading efforts by suppliers to design cockpits. The company has assembled more than 3 million cockpits to date.
Mannesmann VDO built its cockpit business on a core product, instrument panel controls. It expanded its product lineup last year when it bought Philips' PCS navigation and communication business. The integration of PCS will be complete by year end, Grafoner says.
Mannesmann VDO continues to use the Philips brand in the traditional car original-equipment audio market. The company has introduced a new brand, VDO Dayton, for high-level navigation, telematic and communication systems. Mannesmann VDO expects the market for navigation systems in Europe to triple, to 1.6 million, in the next two years.
At the Frankfurt auto show last month, the company introduced new VDO Dayton modular navigation systems, which broadens the range of prices and options available to buyers.
In the long term, Grafoner expects the number of module suppliers to decrease. He predicts that VDO's strengths in integration and electronics will give it an edge over companies whose background is primarily in plastic parts.
'We see from our customers' orders that they are looking for our expertise,' he says.
Grafoner says VDO is working on cockpit modules with at least five customers. He does not think that working with several manufacturers represents a problem.
'We have an organization that can handle the ideas for one customer independently of the others,' says Grafoner.
So far, Mannesmann VDO has developed cockpits for niche models such as the Smart car.
Grafoner admits the company does not yet have a contract to supply cockpit modules for a high-volume vehicle.
'We have been extremely close (to getting one) just recently, but in the end it was a political decision within the manufacturer itself,' he says.
Sales at Mannesmann VDO grew 7 percent to $2.4 billion in the first eight months of this year. Says Grafoner: 'The second half of 1999 is a little bit slower, but we are still growing.'