Mike Crawford: All right. Well, thank you very much.
Harold Bevis: Thank you, Mike.
Operator: [Operator Instructions] Our next question will come from Tom Kerr with Zacks Investment Research. Please go ahead.
Tom Kerr: Good morning, guys. Most of my questions have been answered, just curious about the China business and what’s driving that sort of growth improvements there. Is it product-specific or more background-type issues?
Harold Bevis: Yeah. I’d say it’s mostly self-caused, so a year ago when Tim and I came in and we kind of challenged the global commercial teams to grow in adjacent areas that make sense for us and don’t pursue any kind of silly moonshots. The China team had a lot of opportunities in front of them with the top 50 OEs in China and has been very successful, the team there, led by Rex Huang. And it’s very heavy, Tom, into steering, electric power steering, EPS, we call it. We’ve steered away from engine components in that market. Obviously, there’s government mandates to switch to fully electric vehicles, new generation vehicles they call them. And so we haven’t pursued engine parts in that market. We’re primarily after vehicle control sensors, steering, braking, seat controls, window controls, anything that has a worm gear.
So, if you looked at our machine business, our machine businesses primarily turned parts, turn to parts, there’s a lot of different types of machining in the world. We’re an expert in turn to parts. I’m down to the nano level. So that’s a smaller group of people that can do what we do with that level of precision. And so, we’re fundamentally in China looking at where are turned machine parts on vehicles and getting after them. And obviously, there’s a tremendous amount of steering and if you look at self-op — self-driving vehicles and automated vehicles that the precision steering and braking is dramatically increased and so there’s a higher need for precision parts. So, we saw the opportunity to grow in adjacent markets are basically low risk for us and basically leveraging existing capital.
Some cases with new customers, some cases with existing customers and in our company that’s the only facility that’s nearing capacity, 24/7. So they’ve done a great job there. And if you look at the vehicle production inside of China, in China there’s an ability for the industry to produce two times the amount of vehicles consumed indigenously. So I know you follow the market, but last year or recently, China passed Japan on the global, the number one global vehicle exporter. And that’s getting a lot of press in the Wall Street Journal, President Biden and Trump and premier energy is in Europe right now with Micron and meeting with European leaders. And top conversation is, hey, you guys are coming in hard with your automotive products here and so they’ve really aggressive about exporting in this industry and the biggest export market for China right now Russia, Australia and Mexico and we’re participating in it.
So we’re participating in the Chinese government’s strong export behavior on vehicles made in China. And we’re participating in China, China for China program of electric autonomous self-driving vehicles. And additionally, China is one of our lowest cost plants that in our Brazil plant. And these customers are global and we become globally approved as a supplier when we when we win these positions. So it’s actually opening up opportunities for us in the United States. You’d normally think a US-based company like us with leverages relationships into China. This is the reverse. We’re leveraging our successful business model in China and becoming approved in the US and in Europe and in Brazil. So, it’s really key to our future. If you look at our growth strategy Tom, it was a big pie chart.
Growing in China is about a third of that. So we’re going to we’re going to continue doing that in China. It’s very important to us.
Tom Kerr: Thanks for the color and how the growth at times. We’ll take the rest of questions offline. Thanks.
Harold Bevis: Well, thank you everyone for joining us today and for the excellent questions Tim and I and Mike got some action items here and we’ll be responsive to them that next time. Our transformation continues to take shape operationally, commercially and culturally. And while there’s more to be done, we believe that we’re going to continue to execute and deliver profitable growth for all of you shareholders on the phone. And we’re committed global team and excited about this year, really excited about share and we’re getting excited about ’25 also and we look forward to sharing our successes with you in future quarters. And with that, I appreciate it and everyone have a good day or in the call now.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
