Okay, good morning, everybody. We're going to get started with our next session. I'm Itay Michaeli, Citi's U.S. Auto Analyst, and we're delighted to have Aptiv back with us at the conference. The company recently reported Q4 results. There's plenty to talk about, and so we really look forward to the conversation.
From Aptiv, we're very pleased to have Kevin Clark, Chairman and CEO, as well as Joe Massaro, CFO and Senior Vice President of Business Operations. We'll keep this to a fireside chat. If you do have questions throughout the session, just feel free to raise your hand, and we'll get a mic over to you. Kevin, Joe, thank you so much for being here. Great to see you both.
Thank you, Itay .
I thought just because we're three weeks since earnings, we'll start with some financial follow-ups, then we'll get into tech and other kinda key topics. But maybe just first, you know, I guess we're halfway through Q1. Just curious, how are things going thus far? Any key industry observations to share versus expectations?
No, I'll start, and Joe, obviously, Joe should chime in. No, I think things are in line with what our expectations were when we announced earnings. So as we look at, you know, to your point, we're only weeks into the quarter, but things look like they're playing out exactly as we expected them to, so. No major updates there.
Good. Sometimes that's good. And so, you know, maybe sticking on the financials, obviously, a lot of inbounds we had on the revenue guidance, as I'm sure you have as well. And, you know, the primary question we've been getting is, you know, what's Aptiv's degree of confidence in the 2024 revenue bridge, particularly in areas like customer mix and backlog and launch timing, even trim mix? Maybe if you just address, starting with the top line, just the overall degree of confidence and how you're kinda looking at some of these drivers.
Yeah, I think when it comes to our adjusted growth forecast of 7% for 2024, I think we have as much confidence, probably a little bit more than we've had the last couple of years, just given the supply chain disruptions have subsided significantly. We really don't see customers being disrupted by chip availability or supply constraints.
As always, we've got a fairly robust forecasting process for the current year, so we're on our customer schedules, we're sort of a rolling 12-week production schedule, with their full production forecast for the year. So we're tied out with customers. The supply chain is, effectively back relative to where it was over the last couple of years, so feel good. I do know we get a lot of questions, and I think, you know, you've heard us start to distinguish between growth and growth over market.
Clearly, our 7% growth in a flat vehicle production environment, we feel good about. I think growth over market, assuming production stays flat, should be right around that 7% as well. Obviously, saw some impacts last year as it related to the UAW strike impacting growth over the market, North America, and some China OEM customer mix impact as well. So, what we can control, what we can drive in terms of revenue growth, feel very good about. Dynamics in the market, assuming they normalize back out, you know, we believe we'll grow about 6%-8% above vehicle production as well.
Terrific. And I know that you don't disclose annual net backlog. You do disclose bookings. We'll, we'll come back to that. But roughly, how should we think about be like, backlog contribution in the $1.2 billion of, of sales growth this year, or at least maybe backlog contribution this year relative to, to last year?
Yeah, we've got—I mean, listen, we're continuing to grow, obviously, and we'll have customer launches of new programs that were in prior bookings. The way I would think about it, we tend to book revenues in a given period that turn into bookings in a given period that turn into revenues over a two to three-year time frame, depending on what business, depending on the programs.
And if you look back, just historically, you can see, you know, 2017, 2018, 2019, when we're $15 billion, $16 billion, $17 billion of revenue, and we're booking $20 billion, $22 billion, $23+ billion of revenue, you can sort of follow that through, and we'll do about $22 billion of revenue this year. So the bookings tend to manifest themselves as revenue two to three years out, and the programs run from anywhere from 5-7 years.
I think the only thing I'd add to Joe is when you look at program launches, so 2022, I think roughly 1,700 or 1,800 program launches last year, just a bit over 2,000. This year, north of 2,000. So to Joe's point, when you talk about bookings revenue bookings, bookings turning into revenue, that's reflected in the pace of new program launches that we have throughout 2024.
Got that. That's helpful. So more launches this year, for sure. And then one more just a top-line outlook for the year. What are some of the sources of the biggest sources of downside risk or upside surprise? Kind of what do you think can go right or wrong in the outlook, maybe the top one or two?
Well, like I said, we're on customer schedules for the immediate year, so, particularly within that near sort of rolling 12 weeks, particularly as in the supply chain disruptions don't typically see moves in those near-term forward forecasts. Our Active Safety business, which finished last year at $2.5 billion of revenue, continues to be a strong contributor that'll grow well above 20% this year.
You know, Active Safety is highly sought after by both our OEM customers as well as consumer vehicles, so, expect that to continue to be strong. High Voltage, as we've talked a lot about, High Voltage has certainly come in a bit. We're now forecasting High Voltage growth around 20%. That was almost 30% over the last couple of years. We've seen customer and I think this is sort of well-known at this point.
We've seen customers pull in their schedules, particularly in North America, a little bit in Europe, while EV remains very strong in China. So our High Voltage business finished last year at about $1.7 billion of revenue, and again, would expect that to grow right around 20% this year. So listen, I think in a stable vehicle production environment, all of our drivers are in place, from a revenue growth perspective. We've got a, you know, an engineered components business, so think connectors, cable management and fasteners. That business is well above $6 billion of revenue at this point, growing, call it 5%-6% per year.
Everything's growing in line with our expectations, and you know, I don't think maybe you won't see the upside to vehicle production you saw over the last couple of years, but very comfortable with the 7% in a flat environment.
Perfect. And to think about the broader revenue margin bridge for the year, how consequential are commercial recoveries from OEMs at this stage? Are we pretty much set in piece price, and it's kind of, you know, not a sure thing, but reasonably assured, or is there still a lot of potential moving factors tied to those outcomes?
Yeah, there's some in there. The team's done a great job working with customers over the last couple of years. We've talked about that and doing that, you know, while at the same time booking record levels of bookings. So there's some amount. It's somewhat dependent upon what we see from a material inflation standpoint, what actually transpires, what we see from a labor inflation standpoint. The bulk of that's in piece price today, but there's a few customers that we're working with at this point in time to push more of that to put more of that inflation into piece price.
Great. And a few for financials. And again, if anybody has any questions, feel free to raise your hands. On the Q4 call, I think you provided sort of an update on where you are on the 2025 margins, relative to the initial CMD targets. But I was hoping you can touch upon where you think you stand on a dollar basis for revenue and OI, just given the margin rate, you know, can move around on a lot of different factors. You know, do you think you're sort of tracking to the revenue and OI, maybe just the revenue? How do you feel about the dollar amounts you put out there?
Yeah, I think from a dollar value perspective, 2025, this was the targets we provided at Investor Day last year. I think the dollar revenue, dollar OI, we're, we're basically right on, you know, within, within sort of a reasonable sort of guidance range. I think what we cautioned, on the fourth quarter earnings call was actually the margin rate.
So we've seen really strong growth, some areas growing above, our original expectations, stronger vehicle production than the original forecast model from Investor Day. We are seeing some margin rate headwinds, which we call at about a 100-150 basis points for 2025. So we had forecasted roughly 14% operating income margins.
We were asked a question about where we stood on that on the earnings call and said, basically, if we had to call it today, we see about 100-150 basis points of headwind on that 14%. Certainly not giving up at this point. 2025 is, you know, obviously a couple of years out, primarily driven by a couple of things that, you know, we had in the Investor Day model but are coming in higher than expected.
So, primarily around Mexico inflation, we're seeing a tremendous amount of inflation in our Mexican workforce. We had an estimate of 15%-20% increases when we gave the Investor Day guidance. That's coming in 25, 30%, in some cases, some locations, north of 30%. So obviously, the team's taking actions to deal with those.
Kevin on the earnings call talked about increased focus, which we've been doing a lot of but actually accelerating and increasing our focus on automation in the factories to actually take labor out since a big driver of that labor inflation that increases labor inflation, and looking at other alternatives with that footprint.
The other driver really is a strengthening of the peso beyond sort of what we had expected. Peso strengthened significantly in early 2023, 25% appreciation over the Investor Day model. So, again, working on it, not giving up, but wanted to just provide an update on where we stood. But again, I think from a dollar perspective, we'll be there. It's really a margin rate that we're working through.
Got it. That's very helpful. Given the inflation, Joe, you just described, and I think, Kevin, you mentioned on the call, on the Q4 call, the automation, I think, at S&PS. Historically, automation was not a big part of that business, I think, just because it didn't make a lot of sense. Is that now changing, and how big could this be in the next five to eight years for you?
Yeah, it's, there's an element of, you know, in response to labor inflation in Mexico and elsewhere, an increased demand for well, an increased need for automation. There's also, as you think about, the complexity of a harness going from where it is to more standardized, from an OEM standpoint. Actually, product design enables the opportunity to do more automation, right?
Historically, the wire harness was literally the last product that was designed by an OEM or by Aptiv for an OEM and put into the car. Now it's been brought up, it's been pulled forward. There's a lot more focus on how do you take copper content out, weight content out, mass content out. So how do you simplify? How do you standardize?
We've talked about. You've heard us in the past talk about Zonal Controllers, Central Vehicle Controllers, things like that, which gives you the opportunity to kind of rethink and take a portion of that harness and actually standardize, which enables you to automate. I think by 2030, end of the decade, our target, our internal target at this point in time is to have more than half of that activity automated. Part of that is to drive towards Smart Vehicle Architecture that we've been talking about over the last several years. Part of that is, quite frankly, in response to what we see from a labor inflation standpoint.
Got it. So it's somewhat tied to the move to SVA, where you get the benefit of the content, but also yeah, there's a, you know, again, going back, there's a real focus when you think about SVA, when we talked about Smart Vehicle Architecture, when we talked about simplifying, standardizing vehicle architectures so that you can take out weight, mass, and you can, you know, separate software from hardware. That drives standardization, more standardization, easier to automate.
Perfect. And then one more financial question, and we'll kind of shift gears to tech. How are you feeling about the 2030 targets at this point? Obviously, EV adoption's slower, but your bookings have been very strong. You know, the $40 billion, 17%, should we assume maybe a year or two behind? Can you kind of still get there? How are you feeling about those targets?
No, again, I think from a dollar perspective, we're lining up pretty well, right? We've talked about having a $40 billion business in 2030. You've seen us over the last couple of years with, you know, $34+ billion worth of bookings. Those, as I said, will start to convert to revenue over the next couple of years, and expect that to continue to grow. I think there's obviously been a lot of focus on EV and EV numbers. We had historically been fairly conservative. So our long-term EV forecast was for EV penetration to be between 30%-35% globally in 2030.
You know, at the time we gave that Investor Day guidance, we got a lot of criticism for being far too conservative. I think a lot of the benchmarks were 50%+. So that's, you know, I do think that sort of 50% certainly coming in when we sort of look at the numbers, and what our customers are planning, sort of where the world is going, you know, still see that between 30% and 35%.
So, you know, as I said earlier, you know, the rest of the business continues to grow, in line with expectations and continue to do a really nice job on our adjacent market growth, where we've, you know, taken the business now to almost 20% non-light passenger vehicle revenues, adding revenues in from commercial vehicle, aerospace, defense, telecom. So we're starting to get a, you know, a good mix of revenue in end markets as well.
Yeah, I think qualitatively, Itay, we'd say, and obviously, it all needs to translate into the financials. We, the management, we've never felt better about the business, in terms of our product portfolio, where we sit, in terms of what we enable, in terms of our capabilities in and around vehicle architecture, in and around software, you know, in and around compute. It's certainly reflected in our bookings.
When you look at our customer mix, hey, are there some areas that we'd like to continue to see improvements? Like Japanese OEMs, yes, but that's been a focus area. And we've talked about our more recent bookings in areas like ADAS. When you look at the China market and, you know, the China locals, a significant ramp-up in bookings with meaningful Chinese locals.
We have confidence in their sustainability and profitability. Those locals looking for us to support them as they try to export out of China or move production out of China. So from our standpoint, you know, the business from a competitive standpoint is never been better positioned.
Perfect. On EVs, you read what we all read, and I'm curious kind of how. What are your thoughts on the current investor sentiment around EV? You've been right on your EV call, certainly on 2030, although now I think maybe some people may even be below that. How would you compare what you're seeing out there in broader investor sentiment in EV versus A, what you think, and B, what your customers are telling you and what you're seeing in forward plans?
Yeah, let's start from a customer standpoint. North American customers are obviously struggling with EVs. But at least the three primary, the D3, are all committed to electrification. And part of that is whether, you know, whether EPA targets are pushed out or not to hit those targets over the medium and long term, they need to move towards electrification.
They have to. They don't have a choice. Second piece that we lose sight of, if they're not investing in the EVs, then they need to be investing in internal combustion engine technology. That's an expensive calculus. So at the end of the day, they would rather go down one path versus another path.
Now, obviously, there's a bit of a transition there, but we would say there's broad-based commitment to electrification, maybe near-term is more adoption of plug-in hybrids than what was originally estimated, but commitment to electrification. North America will be the slowest, as we've always thought. Europe, commitment will remain there. Maybe there's a slight push out of CO2 targets.
Our general view is, though, that will not be in an extended period of time; all the European OEMs are focused on their electrification platforms. And then China's doubling down, right? We see what China's doing for the China market, which tends to be more of a national security sort of mandate as well as a desire to lead in the technology mandate. And we see what they're doing in terms of exporting to, you know, European and South American countries.
So we would say, in general, the U.S. investment community is probably more cynical about electrification. Our view is probably overly cynical, but these things evolve. And, you know, so we think there's Joe talked about our historical targets. We're roughly 30% growth in our EV, high-voltage portfolio.
We scaled that back to 20%-21% sort of growth, which is still really strong growth. We have platform solutions that save our customers somewhere between 10%-30%, if they adopt our full platform solution. And when you think about the cost headwind that's referenced in terms of adopting EVs, that's why we're seeing such a significant demand. And, you know, we're on the path of enabling it.
Terrific. Kevin, terrific, new business wins, nice outlook for 2024. I'm trying to kind of align those numbers, $34 billion-$35 billion, with the overall pace of adoption of next-generation platforms, whether it's ADAS, you know, SVA, because there still seems to be some OEMs trying to in-source some of these things.
And so could we still see this potentially accelerate, A, if we have more OEM outsourcing and some have visibly struggled with in-sourcing, or B, as we just get more rapid adoption? Kind of what do you see how do you relate this number of bookings to the overall pace of adoption and opportunities from potential outsourcing going forward?
Yeah, listen, more technology's going into the car, software and hardware, excuse me, and OEMs are in need of more support from a strategic supply base, folks that bring kind of integrated platforms and can do systems integration. That's, you know, something that we do, and we do very well. As, you know, we've always said, this whole concern about OEMs in-sourcing everything was overstated.
You know, while that narrative was taking place, we were booking north of $30 billion in new business awards. I think we think what's going on is, hey, there is more content going into the into the car. Some of that with OEMs that have capability, it's certainly an opportunity for them to do more if they see value in that.
If they're thinking about their business from an economic and return standpoint, there are things that obviously they shouldn't be focused on, in our view, in designing and insourcing. And what's incumbent upon us is providing them with solutions that, again, lower their costs, that enable them, whether it's electrification or it's ADAS or it's User Experience, enable them to achieve the targets that they want from an overall vehicle performance standpoint and do it with quality.
And, you know, we have experience in those areas that are most relevant in the vehicle, like Active Safety. And, you know, those are the areas that we continue to win. Our general view is you're going to see more dependence upon strategic suppliers, players like ourselves that play across multiple aspects of the vehicle, others that are very niche or focused on a single area, whether it's just User Experience or it's just ADAS.
They'll be more challenged because we're seeing domains consolidate, right? We're seeing, you know, sensor fusion, and we're seeing, you know, chips basically now, you know, moving towards a situation where you're using the same silicon to basically operate the in-cabin activity as well as the Active Safety capability. Those are all things that we're leading on, that we're investing in. So we're enabling that.
Kevin, to what extent is Wind River also enabling that and, and giving you a competitive advantage over some of these other more focused suppliers in, in one or two domains? Maybe just an update on, on Wind River with that as well.
Yeah, so Wind River for us, when you think about Wind River is at that layer between the hardware and software where it really allows you to extract hardware from software, right? So it's real-time operating systems historically for aerospace and defense solutions, for telecommunication solutions, for industrial solutions. A&D and telco have gone through the, you know, that separation of hardware and software over the last decade, and Wind River's been very instrumental in that.
They provide Linux and hypervisor solutions as well for that space. They also have an engineering toolchain called Wind River Studio that optimizes software development and allows full lifecycle management. We're now using it on a number of our programs at Aptiv, and we're seeing from a productivity standpoint 20%-30% productivity in our software solution.
So when you think about the OEM, we have a customer who's responsible for ultimately designing the car, delivering the car, but we also have a customer that's the engineering organization, that whether we have a significant portion of that program or not, they're involved in that activity. And to the extent we can give them line of sight, they can be involved in the development, the deployment, and the operation of the software on the vehicle. They can get full visibility. That's critically important.
And then when you think about architecture, you know, a lot of, you know, again, Itay, going back to your question about in-sourcing of activity, in-source or outsource, really, at the end of the day, doesn't matter if you really have a monolithic architecture.
If you don't have the ability to upgrade, enhance, address issues in the vehicle, software architecture because of the way it's architected, Wind River Studio is fully containerized, can go across multiple domains versus having unique domains, where software is integrated into the middleware, into the real-time operating system, provides the OEMs with flexibility to use whatever chip provider they'd like to use, whatever cloud provider they, they'd like to use.
And then we have the software that sits above that, right? The ADAS software, the User Experience software, the battery management system software that's, you know, designed or architected in a containerized way as well that, again, allows them to do regular updates or OTA on the vehicle versus, you know, three or four times a year.
Terrific. And you know, you mentioned before the strong bookings is occurred even with some of the insourcing efforts. And of course, some of the automakers who've been insourcing have had some well-publicized issues. If we were hypothetically to see some of those automakers begin to shift more back towards outsourcing, is that potential upside to bookings over the next couple of years?
Yeah, it could be. Listen, I again, I think what we would, Joe and I, would tell you is that push towards we need to vertically integrate, which we would say that we don't hear that. And I think part of it is because what you read about in the newspaper, some of the challenges that some of the OEMs are having, there are areas that they consider strategic that they'd like to have some involvement, you know, more involvement in than what they've had in the past.
And again, that's why we've, you know, we've been talking about we're developing an open system that allows choice, allows flexibility. We'd prefer to do the full platform. We think that's a better value proposition for the customer at lower cost. But if a customer wants flexibility and wants to contribute a portion of that technology, you know, they're positioned to do so.
Terrific. Maybe switching gears to Active Safety. You've had some notable wins, including, I think, radar with some Japanese OEMs. How are you feeling about the 25% sales growth that you put out at the CMD? You know, what's quoting activity look like? And maybe just an update on Gen 6, what's your goals to achieve with Gen 6 this year?
Yeah. So our Gen 6 ADAS solution is our next-generation solution. It's a full platform, from our hardware to the Wind River RTOS and Linux solution on up the software stack. We've done significant development from a radar technology standpoint, which enhances the overall performance of the platform. The platform is vision-agnostic, so you can use Mobileye.
You can use other vision providers. We have a partnership with a company called StradVision in Korea where we're working very closely. We're in active dialogue with, I don't know, roughly a dozen OEMs now about their next-generation ADAS solution. Performance or design of the system significantly reduces the dependence upon compute. So cost is and efficiency is significantly lower. Performance is very strong.
So when OEMs look at the kind of performance versus overall cost, dependence upon compute, ability to continue to enhance the program with enhanced radar solutions, vision solutions, there's a significant amount of interest. So we'd expect to announce a few bookings in calendar year 2024.
Yes, that's great. And on Gen 6, is that generally targeted towards premium segments? Is it more kind of quasi-mass market?
Fully scalable. So we've really focused on how, how can we develop a solution that meets the needs of an OEM who needs to scale from L1 up to L3, with SOP targets of roughly 2026. So that has been the real focus. So when you go to a, you know, an OEM that has multiple brands, one of the challenges they wrestle with is, you know, how do they bring the cost down of a premium ADAS solution to apply to the mass market? We've really focused on how do we how do we make sure that it applies to mass market and we can build performance up from that to meet the L2+ or L2++ or L3 needs.
Interesting. That's great. And as we think about the next few years, just remind us how should we think about R&D spending in general? I think you were at 6.5% or so last year. And I know it's in your COGS, and so actually gross margin ex R&D, if we were kind of like a tech company, it would be significantly higher. How do we think about that with all the launches you have and the bookings?
Yeah, listen, I think, and maybe I cause confusion. I think when you look at our engineering to sales over the last, I don't know, three or four years, we're down, I don't know, 200 basis points.
Yep.
So significant, you know, productivity improvements in engineering to sales. Now, what Joe and I have tried to do is and it's reflected in the numbers, is take some of that performance and reinvest that in productizing our software portfolio, advancing our radar solutions, advancing our SVA solutions, our CVCs, OSPs, Zonal Controllers, investing in areas like power electronics, all of which we've had significant success in.
So as we look at total engineering, we've been purposeful in rotating from 20% of that R&D spend being advanced engineering to last year, it was roughly 30%. Now, we go through the normal sort of process of, is this going to return? Is this going to have an adequate return?
You know, our view is it certainly has, and that's reflected in, you know, the $30+ billion in bookings we've had over the last three years and the, you know, north of $34 billion in bookings we expect for 2024. So that's all focused in that advanced, you know, we refer to it as advanced development activity.
Absolutely. Maybe shifting gears, and if there are any questions, feel free to raise hands. On customer mix, obviously another topic that came up a lot, post the quarter. How do you think about balancing, you know, targeting different customers while balancing maybe the growth of the market targets and focus that people have versus ROIC in your business as well? Obviously, with some of the newer players in China, I'm sure that's more of a consideration now than maybe several years ago. How do you go about doing that? Who do you want to work with? Who do you target? How do you balance those two?
Yeah, listen, we, well, we start with. We focus on return. It's a big piece of the management compensation plan is return on invested capital, pushed down to our business units, so all the way down, business units and regions. What's important for us is that we're partnering with OEMs who are going to build the vehicles and have programs that we're going to make money on.
So, you know, a great example is China, right? Chinese local OEMs. There are over 125 OEMs in China, and we, the bulk of our business is with the top 12. From a China local standpoint, that's where we're focused for two reasons. One, we have confidence in their sustainability. Two, our view has been that they eventually were going to focus on export, which makes them even more dependent upon Aptiv.
When you look at our you know launches and our bookings in China as an example, I think the last three years we've booked $6 billion of customer awards that are now launching you know 2024, 2025, 2026. 60% of that is with local Chinese OEMs. So we talk about you know how do we see share more in that overall market? We'll see it there.
But listen, you get below the top 20 OEMs in China, there's an element of risk you're taking. And it's a group of OEMs who by and large oftentimes lose money, which likely means their supply base is losing money. So we try to be selective. On the Japanese OEMs, that has been a challenge to crack for most non-Japanese suppliers.
They have a structure in that market, that's operated reasonably well over the last few years, or last several years. We've had a lot of success more recently, on a global basis with our ADAS technologies. The Japanese OEMs, that's been less of a focus. Our technologies are more advanced. So we've had some significant awards from a radar standpoint, which we think positions us well to continue to penetrate there. And that's an area we focus on.
But again, it's all ultimately focused on margin and return on capital. And when we look at programs, you know, Joe and I have meetings with our team on a weekly basis where we go through what, where do we stand from a pursuit standpoint? What's our strategy from a, you know, basically, you know, pricing standpoint? The big focus is on return and margin rate.
Absolutely. Kevin, Kevin, when we see the Chinese OEMs, I think we talked about it before, and just a very rapid product development cycle. Sometimes what takes years in the Western markets can be done in a much shorter time frame. Do you think other OEMs around the world will have to adopt these much quicker cycles? And if they do, is that a benefit for you? And maybe are you already seeing that benefit with some of your recent ADAS radar awards that you mentioned?
Yeah, the Chinese OEMs, to put in perspective, what we launch in North America for a more advanced solution is typically, Joe mentioned, it's from award date to actually SOP is two to three years. In China, including on the ADAS side, that can be less than a year. Now, part of that is the pace of work. Part of that is the amount of testing and validation that goes on. It is different. So OEMs are willing to take more risk on the technology that North American and European OEMs are not willing to take.
And that's where I mentioned about the opportunity of bringing those OEMs from the China market to Europe or to North America. You know, they will have to operate at standards. There'll be testing and validation requirements that are different than what you see in the China market.
As it relates to legacy OEMs in the more mature markets, that's what we're trying to enable when we talk about software architecture and hardware architecture. How do we architect things in a way where, on an ongoing basis, improvements can be made, pushed through, in an efficient way so that OEMs can be constantly enhancing and upgrading the vehicles that they're putting on the road?
I'd also add the Chinese, I think, have been far more willing to adopt a systems approach with suppliers like Aptiv, whether it's High Voltage or full safety systems. That allows them to go much further, faster, right, versus splitting something like that across two or three suppliers and then the OEM taking the responsibility to sort of systematize it. And we, as Kevin mentioned earlier, we've got a lot of system solutions that are very cost-effective for an OEM to put onto the vehicle. And I do think that's one of those areas where I think European and US OEMs could go faster.
Absolutely. And maybe one more on, on customer mix. I think, you know, the, the multinationals versus local, 60/40, I think last year, 50/50 this year. Any number target for the next two years? Where do you think that, that likely goes?
Bookings, bookings have been running 50/50 for the last couple of years. We've actually been a little bit ahead, a couple of quarters, north of 50% on local. So I think that continues to continue the shift. You know, our Chinese business is fairly good size. It's over $4 billion in revenue. You know, if we were having this conversation in 2018, 2019, we would have been 75/25, multinational versus local. So we've actually moved fairly quickly relative to, you know, diversifying that larger revenue stream. So I think that continues to go, certainly to the 50/50 level. And then we'll see where bookings take us.
I think it's possible when you look at the market, when you look at the progress some of the Chinese OEMs are making, again, that top 12 or 15 Kevin referenced. It's possible you get out a few years and you see 60/40, sort of a complete reversal.
Excellent. Maybe one question in the front. I think we could get you.
Just one on, step it back to kind of core customers and pursuing business opportunities. I think over the last few years, you guys have had higher win rates in kind of wider moats with customers in technology-rich products and systems. How's that trending? Are you seeing, you know, again, not Chinese, but core customers, are you seeing higher continuing to see higher win rates? Are you starting to see some of your competitors come with more competitive products?
No. Yeah, that's a great question. Listen, I think win rates are kind of consistent with what they've been over the last couple of years. I think part of that that's our product portfolio, the solution we provide. Part of it, and it's, you know, tough to give you perfect numbers, is we've been much more purposeful about where we go. We've been much more selective, from a pursuit standpoint because there's an investment required, right? You think of the nature of what we provide.
Before you quote, before business is awarded, you're spending time with an engineering organization, right? You're working with them. Then you're working with their purchasing organization, their manufacturing organization. So we've tried to be just much more selective in terms of, hey, where what are the key pursuit opportunities with which customers?
Where do we need to allocate resources at a senior level, at an operating level, and then ultimately at a delivery level from a launch standpoint and go all in and very deep there? In those situations, obviously, the certainty of an award is much higher. For us, those are customers who are they're all focused on price, but they're more focused on the holistic value proposition, the systems approach that Joe talked about, evaluating the full platform and the benefit it brings, versus how do we separate all this and go out for a quote on each piece of this?
Oh, you could sneak in one quick one here. Yeah.
On that, can you just speak a little bit about the price cost for your customers? Are you price competitive or how are you pricing?
Yeah, we have to be price competitive. I mean, it's, you know, table stakes. We really try to focus the value proposition on the solution we provide and how cost-effective it is. So for example, I mentioned high-voltage electrification. We've had customer awards where, by providing them with a full system solution relative to what they originally envisioned, we've saved them versus their target savings, roughly, you know, 20% weight in mass, which translates to 10%-20% from an overall cost standpoint, from a full battery electric vehicle.
From an ADAS standpoint, Itay asked about that Gen 6 ADAS solution. We're really focused on how do we give them a platform solution, a full system solution, which drives down. Our estimate is our solution versus competitors roughly delivers roughly 20% savings, a full platform.
But how do we provide it to them in a way that, you know, they can take all of it or they can take some of it because they want choice, and we're going to give them choice, not a black box solution. So we spend as much time innovating on the technology and what it enables. We spend as much time on how do we take cost out of that system so that our customers can ultimately afford the solution.
Great. I think we have to leave it there. Please join me in thanking Kevin and Joe and the entire Aptiv team for making this happen. Thank you very much.
Thanks.