What Are Lear Corporation’s Key Sources Of Revenue?

• Lear Corporation (NYSE:LEA) generates revenues from its seating and e-systems segments
• The company’s revenues are determined by the size and the composition of the automotive industry
• Global automotive industry production volumes improved by 5% compared to the previous year in 2016 and by 2% in 2017. Rate of change in production volumes directly impact Lear Corporation’s revenues
• Revenues of the seating segment are impacted by the growing trend of customer preference towards crossovers and SUVs where the content per vehicle is higher
• Crossover and sport utility vehicle production has grown to approximately 33% of total vehicle production in 2017 , up from 18% of total vehicle production five years ago. This increase has been driven primarily by China
• China is likely to emerge as the world’s largest automotive market and Lear’s strategy in this region can be a key revenue driver
• Lear has the number 2 position (based on revenue) in the seat systems assembly market globally which is estimated at $65 billion in 2017 by the company. A higher market share in this segment can drive revenues for the company
• The trend towards energy efficient and connected vehicles is likely to drive revenue growth for Lear’s e-systems segment

Our interactive model charts out Lear’s key sources of revenues and you can modify the blue dots in this model to analyze the impact of a change in revenues on Lear’s price estimate.

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