Delphi to split into Aptiv and Delphi Tech.
When Delphi Automotive PLC spins off its powertrain segment and becomes two companies, those companies will have new names: Aptiv, which will concentrate on technology related to self-driving vehicles; and Delphi Technologies, which will focus on powertrain development.
The company announced the new names to investors Wednesday at Delphi’s Investor Day in Boston. The tier-one supplier had announced in May that it would spin off its powertrain business to intensify its focus on autonomous vehicle efforts and the technology that supports them.
The split is expected by March 2018 and is another step in Delphi’s recent reinvention. Zachary Peterson, Delphi spokesman, said both companies will remain headquartered on Delphi’s Troy campus, but in separate buildings.
Delphi, once a bankrupt company, recently transitioned into the high-margin automotive technology sector. Aptiv will continue that push toward developing self-driving systems, and aims to capitalize on capturing and monetizing big data, which is seen as the next big thing in the auto industry. Connected and autonomous vehicles are expected to generate billions of dollars in revenue, and auto suppliers and carmakers are looking for ways to make money off the information gathered from the cars of the future.
The Delphi Technology powertrain company moves to a very different set of dynamics than what automated driving and infotainment are moving to, said Glen De Vos, Delphi senior vice president and chief technology officer: “When you think about the investor community behind us, these are suddenly becoming two different types of investors. And so the people that really are going to be focused on the powertrain investments, we’re seeing the verge way from the investors that are really focused on more of the tech. We’re at a great point right now where we’ve had two very healthy businesses with great outlooks, but at some point, they’re going to start becoming in conflict with each other in terms of resource consumption, capital investment and those types of things.”
Aptiv’s technology efforts will be comprised of Delphi’s current electrical and electronic facets of the company. The company will develop safety components, software and computing platforms to make the “brain and nervous system” of the vehicle, among other technological ventures.
Delphi Technology’s powertrain development will work with both internal combustion engines and electrified cars.
The split will follow a series of moves, partnerships, acquisitions and agreements with technology companies this year. Delphi has purchased minority stakes in autonomous technology companies Valens and Otonomo, and struck a strategic partnership with Rosenberger Hochfrequenztechnik GmbH & Co., which specializes in data transmission and ethernet connectors. Delphi also Ottomatika, the company behind its autonomous driving software, and invested in Quanergy to bolster its autonomous portfolio, and acquired Movimento, Control-Tec, Unwired and MVL to ramp up work in connected vehicles.
“Both (new companies) will continue to embody Delphi’s core themes of safe, green and connected, with the autonomy and expertise to react to the rapidly changing dynamics in the automotive industry and solve its customers’ most complex challenges,” Kevin Clark, Delphi president and chief executive officer, said in a statement. “The vehicle has evolved and so have we. We have expanded upon our heritage of industry firsts with advanced software capabilities and deep systems integration expertise, enabling us to develop intelligent solutions to meet mobility’s toughest challenges.”
Clark will be CEO of Aptiv. Liam Butterworth will be CEO of Delphi Technology; he’s currently senior vice president and president of the powertrain division. When the move is finished next spring, Aptiv will trade under the ticker symbol “APTV”; Delphi Technologies will trade under the ticker symbol “DLPH.”
The new companies will make their formal debuts at the CES technology show in Las Vegas in January.
The split will allow Delphi flexibility and room for quick growth in the technology realm, while maintaining a traditionally strong powertrain segment.