DELPHI 2015 Annual Report Download - page 29

Table of Contents
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also developing and marketing new and alternative technologies that support hybrid vehicles, electric vehicles and
fuel cell products to improve fuel economy and emissions.
Connected. The third mega-trend, “Connected,” represents technologies designed to seamlessly integrate the
highly complex electronic world in which automotive consumers live into the cars they drive, so that time in a
vehicle is more productive and enjoyable. The technology content of vehicles continues to increase as consumers
demand greater safety, personalization, infotainment, productivity and convenience while driving, which in turn
leads to increasing demand for electrical architecture as a foundation for this content. Also with increased smart
device usage in vehicles, driver distractions can be dramatically increased, which in turn results in greater risk of
accidents. Delphi is pioneering vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication
technologies which enable vehicles to detect and signal danger, reducing vehicle collisions and improving driver
safety.
We expect these mega-trends to continue to create growth and opportunity for us. We believe we are well-positioned to
provide solutions and products to OEMs to expand the electronic and technological content of their vehicles. We also believe
electronics integration, which generally refers to products and systems that combine integrated circuits, software algorithms,
sensor technologies and mechanical components within the vehicle will allow OEMs to achieve substantial reductions in weight
and mechanical complexity, resulting in easier assembly, enhanced fuel economy, improved emissions control and better
vehicle performance.
The combination of advanced technologies being developed within these mega-trends is also contributing to increasing
industry development of a fully automated driving experience. We expect automated driving technologies will provide strong
societal benefit as well as the opportunity for long-term growth for our product offerings in this space. Societal benefits of
increased vehicle automation include enhanced safety (resulting from collision avoidance and improved vehicle control),
environmental improvements (a reduction in CO2 emissions through optimized driving behavior), labor cost savings and
improved productivity (as a result of alternate uses for drive time). Growth opportunities in this space result from increased
content, additional computing power requirements, enhanced connectivity systems and increased interconnects. We believe the
complexity of these systems will also require on-going software support services, as these vehicle systems will be continuously
upgraded with new features and performance enhancements.
To guide our product strategies and investments in technology with a focus on developing advanced technologies to drive
growth within these mega-trends, we established, utilize and benefit from our Technology Advisory Council, a panel of
prominent global technology thought leaders.
Standardization of Sourcing by OEMs
Many OEMs are adopting global vehicle platforms to increase standardization, reduce per unit cost and increase capital
efficiency and profitability. As a result, OEMs are selecting suppliers that have the capability to manufacture products on a
worldwide basis as well as the flexibility to adapt to regional variations. Suppliers with global scale and strong design,
engineering and manufacturing capabilities, are best positioned to benefit from this trend. OEMs are also increasingly looking
to their suppliers to simplify vehicle design and assembly processes to reduce costs. As a result, suppliers that sell vehicle
components directly to manufacturers (Tier I suppliers) have assumed many of the design, engineering, research and
development and assembly functions traditionally performed by vehicle manufacturers. Suppliers that can provide fully-
engineered solutions, systems and pre-assembled combinations of component parts are positioned to leverage the trend toward
system sourcing.
Shorter Product Development Cycles
As a result of government regulations and customer preferences, OEMs are requiring suppliers to respond faster with new
designs and product innovations. While these trends are more prevalent in mature markets, the emerging markets are advancing
rapidly towards the regulatory standards and consumer preferences of the more mature markets. Suppliers with strong
technologies, robust global engineering and development capabilities will be best positioned to meet OEM demands for rapid
innovation.
Products
Our organizational structure and management reporting support the management of these core product lines:
Electrical/Electronic Architecture. This segment offers complete electrical and electronic architectures for our customer-
specific needs that help reduce production cost, weight and mass, and improve reliability and ease of assembly.
• High quality connectors are engineered primarily for use in the automotive and related markets, but also have
applications in the aerospace, military and telematics sectors. The Electrical/Electronic Architecture connector