---

Visteon Leading the Way as the One-Stop Source of Climate Control Needs

3 May 1999

Visteon Leading the Way as the One-Stop Source of Climate Control Needs

 Bill Klehm Shares His Views on the State of the Aftermarket Climate Control
                              Industry at NARSA

    DEARBORN, Mich., April 30 -- The automotive aftermarket
climate control industry is evolving as suppliers strive to become a one-stop
source for their customers' needs, according to Bill Klehm, president of
Visteon Climate Control Systems, Ltd.  Klehm gave his remarks April 23 at the
National Automotive Radiator Service Association (NARSA) Show luncheon in
Dearborn, Mich.
    Klehm revealed how Visteon is transforming itself into a full-service
aftermarket supplier.  The first step was the December 1999 acquisition of
PABA, which included ARS, a leading manufacturer of aftermarket climate
control products, and WRW, a network of 14 radiator warehouses specializing in
quick delivery.
    "Combined with Visteon's 90-plus years of experience in the climate
control industry, 29 manufacturing plants worldwide, expanded in-house
capacity and strong, established relationships with suppliers, the ARS by
Visteon brand is stronger than ever," Klehm noted.
    Since the acquisition, Visteon has worked to improve ARS' order fill rate
at 95 percent, has expanded the ARS product line by introducing a new family
of air conditioning components, and has continued to work toward its objective
of offering all-makes coverage.
    "Another major initiative has been creating a more efficient distribution
channel," Klehm added.  "Our goal is to create a seamless distribution channel
that will meet our customers' demands."
    New value-added programs, which ARS by Visteon introduced at the show,
along with improved fill rates and a strategic distribution channel, are
critical elements in Visteon's long-term strategy for increasing aftermarket
sales opportunities.  The dramatic consolidation taking place in the
automotive industry today will leave only a few, very large companies, Klehm
noted.  A key factor to what companies will survive is their involvement with
producing original equipment in addition to their aftermarket replacement
parts.
    "These suppliers will also have to be global," he added.  "This is due, in
large part, to the requirement to supply an OEM wherever in the world they
choose to do business, as well as to enable continued growth."
    Klehm gave NARSA members a glimpse at what he believes to be a growth area
for increased sales and profits in the aftermarket.
    "There is an emerging opportunity within the North American market," he
said.  "The beginning of this decade marked the dramatic improvement in the
quality of new vehicles, and a corresponding decline in demand for replacement
parts.  As one example, the life cycle of a radiator was traditionally thought
of as between four and six years.  It's now estimated at seven to 10 years.
    "Another impact of these higher quality vehicles is a longer service life.
Today, our vehicle population is not only the largest it's ever been, it's
also the oldest, with the average age of a vehicle coming in at 9.6 years
old."
    With the global delivery system of nearly 100 technical, manufacturing,
sales and service facilities located in 20 countries, Visteon is leveraging
the talents of 74,000 employees to deliver innovative, consumer-driven
automotive systems solutions to its customers.