Dive Brief:
- Kimball Electronics’ net sales in its auto parts manufacturing business peaked at $200 million in Q2 2023, a record high 44% increase YoY, Chairman and CEO Don Charron told investors this month.
- The auto industry is the electronics manufacturer’s largest segment, and over 70% of its work consists of making electronic power steering with three major clients who collectively provide steering systems to automakers, Charron said.
- “Significant growth in content is coming from these customers,” the CEO said, “and we are strategically positioned to benefit.”
Dive Insight:
Kimball Electronics has seen major growth in its auto parts manufacturing business, as its capabilities align with an industry adopting more automated steering features.
“Features such as automated driver assist, lane departure warning and self parking are available on today’s most popular cars and trucks,” the CEO said, “and we expect more functionality to be added as consumer adoption increases.”
As Kimball expands functionality hosted in its electronic control unit in line with demand, the average selling price is expected to increase. This was the case over the past decade when new applications were introduced, Charron said. The space in vehicles dedicated to the electronic power steering unit is small, so adding functionality increases the complexity of assembly.
Whether automakers are producing internal combustion or electric vehicles, Charron explained the electric power steering architecture used to turn wheels is the same. As a result, the steering applications Kimball can support are not limited.
“Our growth is not dependent on the type of vehicle produced, which is important as the industry continues to transition to electric vehicles,” Charron said.
The manufacturer also saw an 8% sales increase from Q1, fueled by the recent launch of its next-generation braking system in Reynosa, Mexico. Charron said the system is Kimball’s “largest automotive program which is featured on some of the most popular pickup trucks and SUVs in North America.”
