For Delphi Automotive Systems Corp., 120 injection presses at a new facility in Ohio may not be enough to satisfy demand for automotive electronics.
Delphi is continuing its drive into electronics with its purchase of the vehicle switch and electronics division of Eaton Corp.
Meanwhile, Delphi is exploring options to expand its own facilities.
The supplier announced March 12 it had acquired Eaton's switch electronics unit for $300 million, giving it access to $320 million of business.
Those switches are the link to a market that is rapidly on the rise, and a key to the electronics integration throughout the vehicle, said Ann Cornell, spokeswoman for Delphi's Packard Electric Systems division in Warren, Ohio.
'We see a lot of growth potential for mechatronics going forward,' she said.
The value of the global automotive switches market is expected to nearly double to $7 billion by 2010, from $3.8 billion. With its purchase of Eaton, Delphi becomes the third largest automotive switch maker in the world.
Mechatronic switches include an injection molded housing for a metal and wire unit that serves as a conduit for working systems such as power windows, seats and other electronically controlled moving parts.
Eaton makes switches in steering columns, instrument panels, consoles, overhead systems, doors and lighting systems.
It claimed 8 percent of the global market, ranked behind Japan's Tokai Rika Co. Ltd. and Germany's Leopold Kostal & Co. GmbH. Delphi ranked 11th worldwide, with 2.5 percent of the fragmented world market, Cornell said.
The purchase brings Delphi international business, with manufacturing facilities in Langenlonsheim, Germany; Barcelona, Spain; Gdansk, Poland; and San Jose dos Campos, Brazil, in addition to its sole North American production plant in Matamoros, Mexico.
The 3,800-employee company also has engineering facilities in Downers Grove, Ill.; Illkirch, Germany; and Langenlonsheim, Germany.
But the deal brings more than global reach and a larger share of the switch market, Cornell said. It adds more electronics integration capability just as the automotive market pushes its powered systems into overdrive.
To meet the expanding demand, Delphi already is considering whether to build a plant near Cortland, Ohio, even before the grand opening for its most recent facility there.
The company will host a grand opening May 17 for its 165,000-square-foot plant in Cortland, which includes 120 injection molding presses and plans to turn out 1 billion parts annually.
'It looks as though the market will be growing at a rate beyond what Cortland can produce,' Cornell said.
The company has not committed to building an additional site, but is 'pulling together a business case' for the continued expansion, she said.