That’s where we really see this multiplier effect is in China, when you look at content per vehicle. We’ve talked a lot about, when you think pelvic crash management, belts to seats, massage systems, sound in seat and those things are now being right across into Europe and into the Americas. That’s where you see this really big accelerator of content per vehicle. To your second question, exposure and risk of capital and capital deployment, we’ve been I think very good stewards of capital when it comes to leveraging existing brick-and-mortar from an EV versus ICE deployment. And really looking at things like long distance jet, particularly in the Americas and when we’ve went after an EV platform, we haven’t installed new brick-and-mortar. We’ve really leveraged existing asset footprints.
We’ve leveraged where we can existing lines run those programs side-by-side with their EV counterparts or with their ICE counterparts, sorry, such that, we’re somewhat agnostic. If the EV platform doesn’t hit, we’ve got the ICE platform and we can kind of run the two both side-by-side and play off on the volume. Where we don’t have the ICE counterpart, we at least have the building, we have the brick-and-mortar. And so we’re not stranded with a bunch of fixed costs. We’re able to offset that with either more trim volume or put trim or foam or metals capacity into the building or other JIP platforms into the building and utilize that labor. We don’t have a lot of stranded costs and we’ve been able to do that really in Europe and the Americas pretty effectively.
We don’t have this big fixed cost overhang on the business right now.
John Murphy: Yes, that’s incredibly helpful. And then just a second question, with the JVs being rebalanced and repriced, can you just remind us your exposure in totality for the consolidated and unconsolidated business, your exposure to the Chinese domestic manufacturers?
Mark Oswald: Yes. Right now, it’s about 40/60, John, so about 40% exposed to domestics, 60% foreign. While we’ve indicated though is, if you go out over the next three years, that flips. And so based on our business wins, based on what we see launching over the next two to three years, it becomes 60% exposed to local domestic, 40% to foreign.
Operator: Our next question comes from Emmanuel Rosner with Deutsche Bank. Your line is open. You may ask your question.
Emmanuel Rosner: Thank you very much. My first question is around the expectation for the outlook for growth of the market this year. In your slide discussing the fourth quarter performance, there was obviously a lot of volatility around it and puts and takes around program launches and some platform mix. I’m curious if you could just discuss at a high level, how do you think about this for the balance of fiscal ’24?
Jerome Dorlack: Yes, I’ll start with that and then I’ll hand it over to Mark to kind of finish it. We still expect for the entire year to kind of be, I’d say flattish from a growth over market standpoint, just looking at how we balance between the regions. China, as we’ve said, we still expect China to be significantly positive to overall growth over market despite where we were at in Q1. If you then go through kind of the other regions, the Americas will be down versus market, Europe down versus market, and Asia really kind of flattish versus market. And that’s just an effect of where we have certain launches in certain platforms in those markets, especially in the Americas, really looking at launches within the year, in particular Toyota Tacoma and then certain and our customers with Wrangler taking out shifts.
There are certain launches on RAM this year that will be impacted by and other things. So, it’s an impact of launches in the Americas along with other shift reductions that will drive that. And then in Europe, we’ve always said there are certain programs there that we’ve wound off and it’s just the continuing of those wind off programs with non-profitable customers. I don’t know, Mark, if you want to add any?
Mark Oswald: No, I think that was a good summary. The only, I’d just reiterate, China It is the growth engine for us, right? And so we’re still expecting, call it, 500, 600 basis points of growth over market there. So, a good news story there.
Emmanuel Rosner: And then shifting to the margin outlook, so about 70 bps of improvement. Obviously, your framework over number of years, let’s say, three years was for about, call it, 3 points of improvement. To get the balance of it beyond what you’re guiding for 2024, is there like a specific timeline around it? Do some of these actions take specific time like unwinding of programs or is there an opportunity to, I guess, accelerate this would be my question?
Jerome Dorlack: So, I think as when we look at this business, Mark and I, I mean, we still firmly believe, Emmanuel, this business is an 8% business. And that’s the, call it, the potential of our portfolio and our business and where it should be at. What I would say is, as Mark and I are into the business now and we continue to evaluate it and we go through our strategic plan, with the extension of certain ICE platforms, the extension of certain metals programs and where those set, we have to go through, look at our strategic plan, look at the layout. And as we go through that, we go through our strategic planning cycle, we’ll come back to you with what that looks like and kind of a timeline to achieve and the levers to pull to get to that 8% margin target and what that looks like.
Operator: Our next question comes from Colin Langan with Wells Fargo.
Colin Langan: In the past, you’ve mentioned, I guess, about a $500 million-ish of unprofitable business that needed to roll off. So is that the business that’s now delayed? And is that going to be now instead of ‘25, ‘26, more like ‘26, ‘27. And also in your overall comments, you actually sounded a little more positive on metals talking about how we’re doing the whole system integration, having metals is important. Is your sort of long-term view of that business becoming a little bit more optimistic?
