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Delphi moves beyond GM

From freep| April 03,2007

Behind the Chrysler Group's plan to add live television as an option for its minivans is a mark of progress for Troy-based Delphi Corp.

Delphi makes hardware for the Sirius Satellite Radio's Backseat TV systems that DaimlerChrysler AG's Chrysler Group plans to introduce in the Town & Country and Dodge Grand Caravan this fall.

As Delphi works to emerge from Chapter 11 bankruptcy protection, the move fits its strategy to build on its strengths and expand its business at automakers beyond its largest customer and former owner, General Motors Corp.

For Sirius, Delphi is making a receiver that accepts satellite signals and a decoder that interprets those signals. The hardware is made in Delphi's plant in Matamoras, Mexico, across the Rio Grande from Brownsville, Texas.

In Chrysler's minivans and other 2008 models, including the Dodge Charger and Jeep Grand Cherokee, Sirius plans to offer the Disney Channel, Nickelodeon and the Cartoon Network in a $470 option. That includes the first year of service. Continuing it will cost $7 a month on top of Sirius' $12.95 monthly fee for satellite radio service.

The technology will be exclusive to Chrysler for a year. Other auto companies are interested but haven't committed to offering it yet, said Richard Betz, who leads Delphi's North American infotainment division serving GM, Chrysler and Ford Motor Co.

While Chrysler is the first to offer backseat live TV as a factory-installed option, it isn't the only company offering in-car live television. A Direct TV product, installed after purchase, offers more channels than the Sirius offering.

But for Delphi, the development further focuses the company on its strengths. Delphi, which also makes an array of parts, including wire harnesses and and heating and cooling systems, has been in the satellite radio business since 1999, starting with receivers for XM Satellite Radio in GM vehicles. It also makes hardware for Sirius satellite radios in Chrysler and Ford vehicles.

Delphi's work with Chrysler further expands its business beyond GM, which spun off Delphi in 1999.

"They've had a rough go after the spin-off," said Rebecca Lindland, director of industry research at Waltham, Mass.-based Global Insight. "They have to diversify both their portfolio of products and also their portfolio of clients."

Since 1999, Delphi has not posted consistent profits and, for most of its history, has relied on GM for a majority of its sales.

In 2000, GM made up $20.6 billion, or 70%, of Delphi's sales, which were $29 billion at the time. The balance shifted in 2005, and last year, GM made up 44% of Delphi's sales of $26.4 billion.

"We continue to work across the spectrum, in Europe and Asia Pacific and in North America, to broaden the customer group," Betz said.



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