DELPHI 2013 Annual Report Download - page 53

31
Going forward, our strategy is to build on these accomplishments and continue to develop and manufacture innovative
market-relevant products for a diverse base of customers around the globe and leverage our lean and flexible cost structure to
achieve strong and disciplined earnings growth and returns on invested capital. Through our culture of innovation and world
class engineering capabilities we intend to employ our rigorous, forward-looking product development process to deliver new
technologies that provide solutions to OEMs. Key strategic priorities include:
Targeting the Right Business with the Right Customers. We intend to be strategic in our pursuit of new business and
customers in order to achieve disciplined, above-market growth. We conduct in-depth analysis of market share and product
trends by region in order to prioritize research, development, and engineering spend for the customers that we believe will be
successful. Collaboration with customers in our 15 major technical centers around the world helps us develop innovative
product solutions designed to meet their needs. As more OEMs design vehicles for global platforms, where the same vehicle
architecture is shared among different regions, we are well suited to provide global design and engineering support while
manufacturing these products for a specific regional market.
Leveraging Our Engineering and Technological Capabilities. We seek to leverage our strong product portfolio tied to the
industry’s key mega-trends with our global footprint to increase our revenues, as well as committing to substantial annual
investment in research and development to maintain and enhance our leadership in each of our product lines.
Capitalizing on Our Scale, Global Footprint and Established Position in Emerging Markets. We intend to generate
sustained growth by capitalizing on the breadth and scale of our operating capabilities. Our global footprint provides us
important proximity to our customers’ manufacturing facilities and allows us to serve them in every region in which they
operate. We anticipate that we will continue to build upon our extensive geographic reach to capitalize on fast-growing
automotive markets, particularly in China. In addition, our presence in low cost countries positions us to realize incremental
margin improvements as the global balance of automotive production shifts towards emerging markets.
Leveraging Our Lean and Flexible Cost Structure to Deliver Profitability and Cash Flow. We recognize the importance
of maintaining a lean and flexible cost structure in order to deliver stable earnings and cash flow in a cyclical industry. Our
focus is on maximizing and optimizing manufacturing output to meet increasing production requirements with minimal
additions to our fixed-cost base. Additionally, we are continuing to use a meaningful amount of temporary workers to ensure
we have the appropriate operational flexibility to scale our operations so that we can maintain our profitability as industry
production levels increase or contract.
Advancing and Maintaining an Efficient Capital Structure. We actively manage our capital structure in order to maintain
a strong credit rating and healthy capital ratios to support our business and maximize shareholder value. We will continue to
make adjustments to our capital structure in light of changes in economic conditions or as opportunities arise to provide us with
additional financial flexibility to invest in our business and execute our strategic objectives going forward.
Pursuing Selected Acquisitions and Strategic Alliances. We intend to continue to pursue selected transactions that
leverage our technology capabilities and enhance our customer base, geographic penetration and scale to complement our
current businesses.
Trends, Uncertainties and Opportunities
Rate of economic recovery. Our business is directly related to automotive sales and automotive vehicle production by our
customers. Automotive sales depend on a number of factors, including economic conditions. Although global automotive
vehicle production increased 3% from 2012 to 2013 and is expected to increase by an additional 5% in 2014, economic
uncertainties persist in Europe, resulting in reduced consumer demand for vehicles and a decrease in vehicle production in
Europe of 1% from 2012 to 2013. Continued economic weakness in Europe or weakness in North America or Asia could result
in a significant reduction in automotive sales and production by our customers, which would have an adverse effect on our
business, results of operations and financial condition. Additionally, volatility in oil and gasoline prices negatively impacts
consumer confidence and automotive sales, as well as the mix of future sales (from trucks and sport utility vehicles toward
smaller, fuel-efficient passenger cars). While our diversified customer and geographic revenue base, along with our flexible
cost structure, have well positioned us to withstand the impact of industry downturns and benefit from industry upturns, shifts
to vehicles with less content would adversely impact our profitability.
Emerging markets growth. Rising income levels in the emerging markets, principally China, are resulting in stronger
growth rates in these markets. Our strong global presence and presence in these markets have positioned us to experience
above-market growth rates. We continue to expand our established presence in emerging markets, positioning us to benefit
from the expected growth opportunities in these regions. We are capitalizing on our long-standing relationships with the global
OEMs and further enhancing our positions with the emerging market OEMs to continue expanding our worldwide leadership.
We continue to build upon our extensive geographic reach to capitalize on fast-growing automotive markets. We believe that
our presence in low cost countries positions us to realize incremental margin improvements as the global balance of automotive
production shifts towards the emerging markets.