Businessmodel of Visteon

Customer Segments

Visteon principally serves customers operating within the automotive sector. The Company principally designs, engineers and manufactures electronics products for original equipment manufacturers across the global automotive industry.

Visteon provides products to the majority of the world’s leading automotive companies, including Ford, Nissan, Renault, Mazda, BMW, General Motors and Honda. Ford, Mazda, and the Renault-Nissan Alliance in particular are important customers, accounting in 2015 for 31%, 17%, and 14% of the Company’s Electronics sales.

Europe is Visteon’s largest market, accounting for 35% of the Company’s total sales in 2015, with Portugal alone accounting for 13%. The US, however, is the Company’s largest national markets, accounting alone for 26% of total sales for the year.

Value Propositions

Visteon provides value to its customers in the following ways:

• The quality and reliability of its products, with the high quality of the Company’s products and services indicated the Company’s ability to secure recurring business from high-profile automotive manufacturers such as BMW, Mazda, and Renault;
• Its efficient and reliable production systems, which enable the Company to reliably deliver products and components to manufacturers during the assembly and manufacturing process;
• The breadth of its product portfolio, with the Company providing a range of audio systems, information displays, instrument clusters, head up displays, infotainment systems, and telematics solutions;
• Its technical and industry expertise, with the Company employing specialist staff and experienced industry executives; and
• Its commitment to innovation and development, with the Company commitment a significant portion of its revenue to research and development activities, with a view to providing its customers with innovative products. ### Channels

Visteon operates a website at www.visteon.com, through which it provides information on its product portfolio, operations and organisation. The Company also operates affiliate websites for Halla Visteon Climate Control Corporation, Yanfeng Visteon, and Duckyang Industrial Company. The Company, however, does not operate an online sales channel.

Visteon makes all of its sales through business-to-business sales channels. The Company’s sales teams are organised geographically, with the Company maintaining a physical presence in the form of customer centres and technical centres across the Americas, Europe, Asia, and Africa, including in Sao Paulo, Brazil; Sofia, Bulgaria; Shanghai, China; Paris, France; Chennai, India; Jakarta, Indonesia; Hiroshima, Japan; Seoul, South Korea; and Rayong, Thailand.

Customer Relationships

Despite its online presence, Visteon does not provide any products or services to its customers on a self-service basis. All of the Company’s sales are made through its direct sales teams, which consult with customers over a period of time in order to establish detailed sales agreements that comprehensively cover the requirements of each individual customer. The Company seeks to establish long-term relationships with its customers, often agreeing multi-year sales contracts.

Visteon provides ongoing support to its customers. It includes a range of technical and corporate information for customers on its website, including product descriptions, presentations, webcasts, and news releases. Customers are also able to contact the Company’s sales and support teams directly over the phone or via an online contact form. Additionally, the Company operates social media accounts, notably with Twitter, through which it is able to interact directly with new and prospective clients.

Key Activities

Visteon is an automotive component supplier.  It is principally engaged in the design, development, and manufacture of electronics products for original equipment vehicle manufacturers across the world.

The Company includes among its customers a number of high-profile automotive companies, including Ford, Nissan, Renault, Mazda, BMW, General Motors and Honda. The Company’s operates primarily through one core business segment, Electronics, which provides vehicle cockpit electronics products, such as audio systems, information displays, instrument clusters, head up displays, infotainment systems and telematics solutions.

The Company’s other activities, including its remaining interior and climate businesses, are organised into a single segment entitled Other.

Key Partners

Visteon collaborates a range of partners throughout the process of designing, developing, manufacturing and distributing its products. The Company’s partners can be broadly placed into the following categories:

• Supplier Partners, comprising suppliers of tools, resources, and services that support the Company’s own production and distribution operations;
• Technology and Innovation Partners, comprising technology and electronics companies that provide technologies and advisory services in relation to the development of the Company’s products; and
• Alliance and Strategic Partners, comprising a range of companies with which the Company shares certain resources and collaborates on joint projects. Visteon has recently established a number of partnerships, including a collaboration with Verizon to produce solutions for connected vehicles, a tie-up with Rightware to develop effective graphic display products for the automotive industry, and a partnership with Autonet Mobile to develop automotive connectivity solutions.

Key Resources

Visteon’s key resources are its technologies and intellectual properties, its manufacturing and development infrastructure, its sales and marketing channels, its partnerships, and its personnel.

Visteon owns or leases 25 corporate offices, technical and engineering centres, and customer service centres in ten countries worldwide, and owns or leases 20 electronics manufacturing and/or assembly facilities in Mexico, Macedonia, Portugal, Russia, Slovakia, France, Tunisia, India, Japan, South Korea, China, Thailand and Brazil. It additionally has 5 manufacturing and/or assembly facilities in Argentina, Brazil and South Africa.

Searches of records published by the US Patent and Trademark Office identified 31 patent applications filed in Visteon’s name, including patent applications entitled ‘Single external antenna for FM phase diversity for a vehicle radio unit’, Efficient two-stage asynchronous sample-rate converter’ and ‘Refrigerant circuit of an air conditioner with heat pump’.

Cost Structure

Visteon incurs costs in relation to the development of its products, the production and assembly of its products – including its acquisition of supplies and consumables, the operation of its sales and marketing channels, the management of its partnerships, and the retention of its personnel.

Visteon accrues substantial research and development costs, which totalled $294 million in 2015, and significant selling, general and administrative expenses – including the payment of salaries and benefits to its global workforce of 11,000 employees – amounting to $245 million.

Revenue Streams

Visteon generates revenue primarily through the sale of automotive electronic components and products. The Company also derives a small portion of its revenue from the sale of automotive heating, ventilation and air conditioning products, and the provision of automotive interior solutions.

In 2015 Visteon recorded total sales for the year of $2.20 billion, down considerably on the $5.76 billion generated by the Company in 2014. This decrease was attributed largely to the Company’s divestment of it’s the majority of its climate control and automotive interior businesses.

Sales of electronics products comprise the vast majority of Visteon’s total sales, notably sales of instrument clusters and information displays, which accounted respectively for 36% and 19% of electronics sales for 2015.