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July 13, 2024
Vehicle digitization drives Visteon to record sales despite chip shortage


A primary driver of Visteon’s growth was its digital clusters segment, which increased 40 percent year over year with key launches in North America. The segment is anchored by increasingly sophisticated infotainment and dashboard displays.

Of the 45 new product launches, 17 were digital clusters, including in the Stellantis NV cross car line, as well as Ford Super Duty trucks, transit commercial vehicles and SUVs. Ford remains Visteon’s largest customer, making up 22 percent of sales.

“Since 2015, we have positioned our product portfolio from primarily analog clusters and AM/FM radios to industry leading digital clusters, centralized domain controllers, advanced displays and smart battery management systems,” CFO Jerome Rouquet said on a call with investors. “These initiatives have enabled us to benefit from the cockpit trends while outperforming in a challenging environment.”

Visteon’s growth, however, has been stunted by a lingering microchip shortage. While the supply bottleneck has improved significantly, the company is experiencing another semiconductor headache — a shortage of microcontrollers, which control everything from air conditioners to headlights in new cars.

“They cut across all products. Every product that we do requires these power chips to drive the rest of the circuitry,” CEO Sachin Lawande told investors. “As we start here in 2023, we see our situation with respect to analog chips improve, but there are emerging shortages in the areas of microcontrollers that is more driven by the lack of wafer supply from foundries to semiconductor suppliers.”

Automotive suppliers from Lear Corp. to Aptiv plc have pointed to the same problem as upcoming headwinds.

Visteon (NASDAQ: VC), whose stock price ticked up 5 percent to $167.11 per share as of Thursday afternoon, anticipates sales of $4.05 billion, working on the assumption that global car production will be virtually flat at 84 million units.

On the microchips problem, rather than wait for the supply chain to catch up, Visteon is implementing workarounds for the shortage by re-engineering some products.

“We are continuing to redesign some of our products to give us more flexibility so that we would be in a position to address more demand as we anticipate,” Lawande said.

Visteon ranks No. 66 on Automotive News‘ 2022 list of the top 100 global suppliers with worldwide sales to automakers of $2.73 billion in 2021.



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