Following are analyst comments relating to automotive suppliers and their exposure to diesel car market.
Goldman Sachs
- Est. Faurecia VW sales make up 25% of total; diesel products 8% of total
- Continental VW sales 15% of total; diesel 3%
- Valeo est. VW sales 20% of total; diesel 3%
- More stringent testing engine emissions testing may be boost to Continental and Valeo (both buy rated)
- Near-term supplier sector has been hit by VW fallout
- Longer-term, powertrain suppliers including Continental, Valeo and Johnson Controls (all outperform rated) may benefit
- A faster shift away from diesel would hit Faurecia, Tenneco (both equal weight)
- Suppliers’ sales exposure to VW: Faurecia 25%; Borg Warner 17%, Magna 11%, Harman International 11%, Gentex 10%, Delphi 10%, Tenneco 8%, GKN 7%
- Expect stricter emissions testing in wake of VW case
- Some suppliers may benefit as automakers will have to buy more emissions reduction tools
- Tools such as selective catalytic reduction (SCR) may become mandatory
- NOTE: Delphi and Robert Bosch are among suppliers of SCR