DETROIT (Reuters) - Self-driving cars and electric vehicles could provide important sources of new revenue for Adient, the $17-billion automotive seating and interiors business that is being spun out of Johnson Controls Inc (NYSE:JCI), Adient's top executive said on Thursday.
"There are new entrants coming into the business, non-traditional auto companies that want to make autonomous and connected electric vehicles," said Adient Chief Executive Officer Bruce McDonald. "It's an opportunity for us to partner in a different way - to provide complete interiors, which could mean much higher revenue per vehicle."
Among the company's newest customers, he added, are two California-based electric vehicle makers - Tesla Motors Inc (NASDAQ:TSLA) and startup Atieva, which hopes to put its first EVs on the road in 2018.
McDonald said Adient supplies the Tesla Model S, but that seats "have not yet been sourced" for the Model 3, which Tesla Chief Executive Elon Musk has promised to begin building next summer.
Adient will be the world's largest supplier of seats and interiors when it begins trading Oct. 31 on the New York Stock Exchange under the symbol ADNT. Chief rivals include Lear Corp, Faurecia SA, Magna International and Toyota Boshoku Corp.
As part of JCI, Adient operates 230 plants in 33 countries, and supplies most of the world's top automakers, building 25 million seat systems a year.
McDonald said even mainstream automakers are beginning to "want a lot more flexibility in interiors - for instance, seats that swivel or travel farther, and reconfigurable spaces so you can work" in a self-driving vehicle.
Adient expects China may become its largest market by 2020, McDonald said. The country currently accounts for 30 percent of consolidated revenue, compared with 35 percent for Europe and 29 percent for the Americas. Adient also derives profits from 17 joint ventures in China, where its largest partner is interiors supplier Yanfeng.
As demand shifts to vehicles with more premium content, and from sedans to crossover vehicles, Adient should see revenues expand, even as overall vehicle demand slows, McDonald said.
"The migration of high-end features such as cooling seats with massage functions to mass market vehicles and the growth of SUVs and CUVs should be big tailwinds for us," he said.