Visteon expects to boost European sales by more than 40 percent by 2005 to $4.1 billion (3.6 billion euros) by focusing intently on fewer product lines.
The 2005 growth target "is already 95 percent covered by orders," said Heinz Pfannschmidt, president of Visteon Corp. in Europe and South America. Not counting business with Premier Automotive Group brands, Visteon's volume with its former owner Ford is expected to stay at about $2 billion.
Pfannschmidt says that Visteon has achieved its European growth with a more in-depth focus on fewer product areas. When Visteon was spun off by Ford two and a half years ago, its product range covered 50 percent of the car. Now that is down to 40 percent and it will fall further in future, he said.
The focused approach has helped Visteon grow despite a declining parts industry this year and an expected 2004 market growth of 2 to 3 percent, Pfannschmidt said.
Because modules and systems can strongly affect the brand position of carmakers, automakers should rethink some early "disappointing" outsourcing efforts, he said.
"I believe there are lots of areas where carmakers are doing things that do not help them to differentiate their brand," Pfannschmidt said.
Other big opportunities for Visteon include finding better solutions where different supplier and automaker engineering teams intersect in developing various vehicle systems.
Pfannschmidt says that Visteon is working to increase its speed of innovation and synergies across programs to meet increased cost pressure and product variety. He is aiming for a 20 percent increase in engineering efficiency by 2004.
Visteon is changing the physical infrastructure of its development facilities to add new technology and customer business group-based facilities in Germany and the UK.
Growth in low-cost countries is an important part of Visteon's strategy, Pfannschmidt said. Visteon has sales of $2 billion in Asia/Pacific and has 40 percent of the Chinese automotive interiors market.
Visteon, the No. 3 global supplier behind Delphi and Bosch, wants to expand the range of products assembled in China to include more audio products, for example, and has considered moving its Asia/Pacific headquarters from Tokyo to Shanghai.
But Pfannschmidt is cautious about committing to inter-regional component supply because currency-exchange shifts cannot be predicted. He warns against simply transferring manufacturing to locations such as eastern Europe without a careful consideration of the supply base and logistics involved, particularly for bulkier products.