Tom Narayan: Okay, thank you. Obviously my next question is on the EV side. I guess the question has to do with how orders work, your order book works. We saw some commentary yesterday from a couple of suppliers suggesting maybe some caution on the order book. Just curious in terms of how susceptible or how concerning could cancellations be should this downturn get more severe, or quote-unquote, EVs slow down and get severe. Do you have a lot of visibility on the orders? It’s a situation of, like, 50% growth going to 30% growth, so you have inertia to help you? Just trying to get a sense of the visibility on the order book around electrification.
Swamy Kotagiri: Good morning Tom. As we look at it, we haven’t really seen any cancellations, and as I had mentioned to one of the previous questions, if there is a volume change in terms of the planning, it is a discussion that we have with the customer, and I wouldn’t say we have seen anything significant. Maybe one topic or one point that might help, if you look at just not electrification but all content on EV platforms, we are in single digits as a percent of sales, right, in 2023. Going out to 2025, maybe one-fifth of our business roughly is connected to EV platforms. But again, I want to reiterate, we always look at volume planning from our perspective based on customer, based on platform, based on segment of the vehicle, looking at IHS data and other sources, so there is, call it the Magna volume that we have to have a judgment on.
That’s one aspect of it. The other one, like I said, even on ICE, there are several programs which don’t hit the volumes that we had predicted, and we have mechanisms to have those discussions with the customers. This is besides having capital outlay in tranches, having flexible manufacturing so that we can flex as the volumes change, obviously within reason, and there are some cases where the volumes are up. It’s a complex [indiscernible] here, but we have had this with customers and there is a little bit of uncertainty, and that’s where I said in some cases, the models on the EV platforms, the customers has come forward with the capital, and some we already had settlements on where the volumes changed significantly. In some cases, we are looking at the same product where the platform has both ICE and EV, so depending on which does better, there’s a little bit of a natural hedge.
There’s a lot of these things that we look at it from our planning perspective to again mitigate risk, not completely but it gives us enough comfort.
Tom Narayan: Okay. Another thing that we heard yesterday was that there seems to be this kind of divergence of opinion on this EV decline story geographically, with a lot of Americans, let’s say, thinking that we’re in this Armageddon scenario, and then over in Europe it’s an opposite view. Just curious in terms of your OEM exposure to EVs, specifically investment, is that something that’s pretty geographically balanced, or how would you characterize your EV exposure geographically on OEMs?
Swamy Kotagiri: Yes, I think generally if you look at our overall sales, we are about 60% or so in North America and about 35% in Europe, and the rest in other, but predominantly China. We have said from a regional perspective, the electrification take rates are higher in China, followed by Europe, followed by North America, but Tom, this is very specific on platforms. We have to not just look overall which segment–you know, it’s a little bit of a judgment to say when we have relationships with the customer, where we’re having reasonable conversations in terms of the business models, which platform, a lot of that comes in rather than a generic view on region by region.
Tom Narayan: Got it, yes. My last one is just on that other topic, the price mix topic. Obviously the OEMs benefited on the way up in the past three years, and if we do get a normalization in price mix, one of the fears is that potentially the OEMs could go to the suppliers and ask for price downs. How has that happened historically in the past? Was it that you guys typically benefit on volume recovery regardless if price mix is coming down for your OEM customers, or do they have the ability to squeeze you guys as price mix comes down?
