Seating and electronics supplier Lear Corp. hiked its 2023 sales outlook Tuesday by about $1 billion after a stronger-than-expected first half of the year for seating.
Lear’s yearlong sales guidance is now $22.35 billion to $23.05 billion.
Fewer supply chain problems, more consistent customer assembly lines and higher production in Europe all contributed to higher revenue than initially anticipated, CEO Ray Scott said at the Deutsche Bank Global Auto Industry Conference June 14.
“It’s been a long time since I’ve been this confident in where we’re at with the business,” Scott said.
At Lear’s Seating Product Day on Tuesday, executives emphasized a strategy of vertical integration aimed at reducing complexity and cost as a key reason for confidence in the company’s ability to gain market share and improve margins over the next four years.
Lear is capable of sourcing 82 percent of seating components internally, up from 36 percent in 2008, said Frank Orsini, head of Lear’s global seating unit.
Lear aims to achieve 29 percent market share of just-in-time seating by 2027, with a long-term goal of capturing one-third of global seating market share. By 2027, the company aims to grow seating revenue to $21 billion from $17 billion, with margins increasing to 8.5 percent from 6.7 percent.
Executives said growth will be driven by expansion of Lear’s thermal comfort systems unit, ongoing customer diversification, new business awards and an overall industry recovery.
Recent acquisitions of Kongsberg Automotive’s Interior Comfort Systems business unit and seating thermal systems supplier I.G. Bauerhin have positioned Lear to grow the thermal comfort systems business to $1 billion in revenue by 2027, said Erik Elie, vice president for seating comfort.
Lear is targeting more business with Chinese, Japanese and Korean automakers and plans to produce 30 percent of Chinese automaker BYD’s seats within the next few years.
Lear said it has at least nine key near-term launches on the horizon, including conquest business awards for the Jeep Wagoneer and Grand Wagoneer, Chevrolet Colorado, GMC Canyon and BMW 5 Series.
Shares in Lear rose 1.32 percent to $140.61 when the market closed Tuesday.
Lear, of Southfield, Mich., ranks No. 10 on Automotive News‘ list of the top 100 global parts suppliers, with estimated worldwide sales to automakers of $20.8 billion in its 2022 fiscal year.