Here’s How Lear Corporation Can Drive Growth Through Its Unique Product Capabilities
Lear Corporation (NYSE:LEA) continued its strong performance in Q2 2017 by reporting an 8% year on year growth in revenues and a 20% year on year growth in EPS (earnings per share). The company operates two key segments – seating and e-systems and its unique product capabilities in both these segments along with its ability to combine the functionality of these segments gives Lear Corporation a huge competitive edge. In 2016, the company significantly outperformed its peer group in several key financial metrics and we believe its strong product differentiation will continue to drive growth for the company.
Product Convergence Provides Opportunity For Profitable Growth
In the seating segment, Lear Corporation has the best craftsmanship and component capabilities, giving it an edge over its peers. Similarly in the e-systems segment the company has expertise in the complete logical architectures for both traditional and high powered applications and capabilities in a broad range of wireless and electronic components. These capabilities make Lear Corporation a strong player in the emerging industry trends. As automotive seating systems become more intelligent and connected, Lear Corporation is well placed to develop these products, given its expertise in both segments. The company’s e systems division has the expertise to develop software which can make the seating system intelligent with features such as personalized sound zones in the seats and seats designed for wellness and comfort using technology. Other companies do not have this expertise, making Lear corporation the clear leader in this market.
As the automotive industry undergoes a transformation, smart and connected cars are likely to dominate in the future. According to Technavio the global automotive smart seating segment is likely to grow at a CAGR (compounded annual growth rate) of around 9% by 2020. As demand for smart seating systems increases, Lear Corporation is well poised to capture this growth with its industry leading products and capabilities to integrate seating systems with the highest level of craftsmanship with the best connected technology.
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