Hello All,
I'd like to do a bit of retracing if you will bear with me.
Way back when, Simula designed the ITS, and approached BMW with it. BMW liked it and wanted it, but said that they only buy from tier 1 vendors, and that they would like Simula to sell the product to them through Autoliv. That is how and why Autoliv got involved.Simula provides Autoliv with the ITS, Autoliv adds a generator and mounting hardware and re-sells it to BMW. BMW pays Autoliv, who in turn pays SMU.
Part two. . .Autoliv's deals with Mercedes and Volvo are not a suprise at all. First, Mercedes said all along that they wanted a different solution from BMW so they wouldn't look like a "me too" company. Second Volvo, being a Swedish company, is essentially attached at the hip to Autoliv. These were basically "gimmees" for Autoliv. The real question is where does Autoliv go from here??
Part three. . . It is CRITICAL to remember that SMU has targeted a market share of 10% or so with the ITS. That means that if the next 16 car companies (measured by volume of side impact products purchased) pick something other than the ITS, SMU is still on schedule. 2 for SMU, 18 for someone else --10%.
Part four. . . BREED. When consulting my 8-ball (circa 1968,) it says that Breed needs to establish technological breakthroughs in auto safety to be considered something other that a "wholesaler" tier 1 supplier. They understand this as evidenced by their new relationship with Siemens. Siemens buys 10% of Breed and signs an agreement to develop and supply the new generation of sensors to Breed. Breed gets technology, Siemens gets sales and equity benefits -- win-win. So what, right? So SMU! Breed buys a stake in SMU, SMU develops and supplies the new generation of ITS products to Breed. Who gets what?? SMU gets an cash injection and greatly increased ITS sales through a strong relationship with a tier 1 supplier.* Breed gets a reputation as a "real" tier 1 supplier with a cutting-edge product line. Breed also gets increased revenues and the promise of more ITS variations come. Can it happen? Well, Breed's boss is on SMU's Board and expressed great interest in the ITS when he was with Morton. Makes one think. . .
Have a tubular weekend all.
* Unlike the other vendor they have used who, after signing the deal with SMU, should have changed their name to Auto-leave. |
