Thank you for standing by. At this time, I'd like to welcome everyone to Visteon's Third Quarter 2024 Results. [Operator Instructions] Thank you. I'd now like to turn the call over to Ryan Wentling, Vice President of Investor Relations and Treasurer. Please go ahead.

Good morning. I'm Ryan Wentling, Vice President of Investor Relations and Treasurer. Welcome to our earnings call for the third quarter 2024. Please note, this call is being recorded and all lines have been placed on listen-only mode to prevent background noise. Before we begin this morning's call, I'd like to remind you this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future results and conditions, but rather are subject to various factors, risks and uncertainties that could cause our actual results to differ materially from those expressed in these statements. Please refer to the page entitled forward-looking information for additional details. Presentation materials for today's call were posted on the Investors section of Visteon's website this morning. Please visit investors.visteon.com to download the material, if you have not already done so. Joining us today are Sachin Lawande, President and Chief Executive Officer, and Jerome Rouquet, Senior Vice President and Chief Financial Officer. We have scheduled the call for one hour and we'll open the lines for your questions after Sachin's and Jerome's remarks. Please limit your questions to one question and one follow-up. Thank you for joining us. Now I will turn the call over to Sachin.

Thank you, Ryan. And good morning, everyone. Thank you for joining our third quarter 2024 earnings call. Page 2 provides a summary of our third quarter performance. Visteon delivered strong results for the third quarter with sales outperforming customers' vehicle production and generating solid profitability and free cash flow. Sales were just under $1 billion, driven by strong demand for our digital cockpit and electrification products. These product lines drove mid-single digit growth over market, which was partially muted by lower sales in China, mainly due to the loss of market share of our global OEM customers in that region. Excluding China's negative impact, our growth over market would have been above 10%. I'm proud of our solid results, which continue to validate the strength of our product portfolio even in a challenging environment. Adjusted EBITDA was $119 million, driven by strong operational execution and our continued focus on controlling costs. Adjusted EBITDA margin was 12.1% for the quarter. Adjusted free cash flow was $73 million in the quarter and our year-to-date total is a record $135 million. The global Visteon team did a great job in launching our products in 30 vehicle models across the world in the third quarter, bringing the full-year total to 71 product launches. We also won $1.8 billion of new business in the quarter, mostly for digital cockpit products and taking our year-to-date total to $4.9 billion. We have a solid pipeline of new business opportunities for Q4 and we should be able to meet our target of greater than $6 billion in new business for the full year. Overall, our third quarter performance demonstrates the strength of our product portfolio and the continued focus on operational excellence and cost discipline by the entire Visteon team. Turning to Page 3. As I mentioned, demand…

Thank you, Sachin. And good morning, everyone. Visteon delivered solid results in the third quarter. We successfully navigated another quarter of challenging market conditions and delivered strong operational performance, both on the commercial and on the cost side. Our growth over market was in the mid-single digits and in line with our expectations. We delivered an adjusted EBITDA margin slightly above 12% and generated strong cash flow. We also strengthened our future growth profile with 30 new product launches this quarter and $1.8 billion of new business wins. The end market and customer diversification initiatives that we have highlighted in recent quarters have continued to gain traction with $600 million of new business wins with Rest of Asia OEMs and further successes with commercial vehicle OEMs and two wheeler customers. Overall, I am very pleased with this performance and continue to be confident in our prospects for long term growth and margin expansion. Turning now to our third quarter financial results in more detail. Q3 sales were slightly below $1 billion. Compared to last year, sales benefited from our market outperformance of 6%, driven by new product launches and strong performance of our digital cockpit and electrification product lines. This was offset by lower customer volumes and lower recoveries from our customers. In terms of performance by geography, Americas had the strongest market outperformance, rest of Asia was positive, Europe declined slightly and China underperformed by double digits. Consistent with past quarters, customer recoveries declined year-over-year as a result of improved semiconductor supply, but were stable sequentially. Adjusted EBITDA was $119 million for the quarter or 12.1%. Our strong EBITDA performance this quarter is the result of our robust sales level and excellent operational performance, including strong cost controls and increased efficiencies. We believe our normalized EBITDA margin continues to…

[Operator Instructions] Our first question comes from the line of Luke Junk with Baird. Your line is open.

Hi, good morning. Thanks for taking the questions. To start-off, hoping to just expand on cluster growth specifically, Sachin. Just hoping to unpack it from both a product launch and sunset standpoint as well as just geographic mix impacts that might be reflected right now, just the growth here pretty flat in a growth over market basis. What are some of the conditions that you would see that are needed to get that cluster business back to an overall growth posture despite continued digital growth right now?

Good morning, Luke. Yes. So in terms of clusters, I would say, first, that the trend of digitalization really continues to be a strong driver for growth of that product line for us. And in Q4 as well, our digital clusters led our product sales. And excluding China, they grew double-digit. So what we really see here is the impact of China that on the surface makes it feel like it did not really grow everywhere, but it's really just in China. Now if you look at our performance this year, we have continued to launch several new cluster programs, about 30% of our 71 new launches year-to-date were digital clusters. And the percentage was about the same for new business wins this year. So -- and at the same time, as we go forward, what we are seeing is that CDCs and displays are going to replace discrete digital clusters and infotainment in the premium and luxury segment of the market. However, we'll continue to grow, especially digital clusters and standalone infotainment in the mass market segment, and we are very well positioned to take advantage of both trends. So in fact, what we are seeing, especially in this environment where there's a lot of pressure on our prices at OEMs in many parts of the world, such as China, is that the shift is also helping us in terms of having a higher sell through of our more mass-market products. We also launched, as you know, a digital cluster with Toyota and we are expecting a very good growth with that customer with that product line as we go forward. So overall, I'm pretty pleased with where we stand with digital clusters. It continues to be a very strong product line for us. And as you've seen with our displays performance, that second line is starting to shape up and I wouldn't be surprised if it becomes as big as digital clusters for us in the next couple of years.

Okay. Thanks for that, Sachin. And then maybe a second question, my follow up would be for Jerome, just on the net R&D or net engineering, second quarter in a row that that's run a little better than expected. Can you just pull apart the two pieces here in terms of project timing, what that might mean to 2025, seems like maybe some spend is deferred and can flow back in and then recoveries just tracking higher. Can you continue to drive a little bit higher than expected outcome on the recovery side? And then you had mentioned also in your prepared remarks some rationalization of R&D in China. So, hoping you could just expand on that and the sort of balance of multi is coming under pressure in China, yet the need to still drive launches with local OEMs there in terms of engineering investment? Thank you.

Yes, thanks a lot, Luke. Good morning. So maybe let me step back a little bit on engineering. We've been running a fairly cost effective engineering organization in the last few years and maybe three points around that. The first one is that our platform approach has been very successful. We also have most of our engineers located in best cost countries and that has been helping our model tremendously. And then finally, we've been working very diligently on efficiencies within our engineering teams, ensuring that they produce quality software on-time in a cost effective manner. So as it relates to Q3, and the two pieces are obviously the gross engineering piece as well as the recoveries. If you step back and look at what we've achieved on gross engineering side, our costs have been fairly flattish for the last few quarters. So therefore, it's been in line with what we've been able to achieve in the first half of the year. Recovery really is what has helped us this quarter and we had an improvement in recoveries versus the prior quarter, but as well versus prior year. And we've been running a little bit ahead this year in terms of the recovery. So timing is hard to predict on recoveries and we think that will still be overall in terms of net engineering within our target of, let's say, mid-single digit percentage of total sales. As we go into next year, we'll keep on looking at efficiencies and we'll keep on as well investing in very critical area that will allow us to grow on a go forward basis, connectivity, AI as well as other areas. As it relates to China, we have now flexed a little bit our engineering cost, especially in Q2 and Q3, to adjust for what is going on in the region. So it is indeed a slightly reduction over there just to adjust for the reality of the market.

Maybe just the China piece, if you could, just a follow up on the local OEMs, just investment in engineering specifically with that cohort?

Yes. We continue to be present in China and we do want to stay very relevant. As you know, there is a lot of technology in China and there is as well a lot of focus on cost, given the pricing that is going on, the price war that is going on. So we keep on investing over there and we are still winning new business, but we'll obviously make sure that we are very selective in terms of the customers that we want to go along with. And maybe, Sachin, you want to--?

Indeed. In fact, this topic of China may be of interest to everybody given how significant of an impact it has been. So let me elaborate on that a little bit. So if you go back maybe last year or the year before, China represented about 15%, 16% of our sales. Now that has come down to about 11% to 12% this year and that's largely due to the loss of market share of our global OEM customers that are selling into China. Now our - if you look at our revenue profile in China, about two thirds of our revenue in China comes from global OEMs, one-third from domestic OEMs. But we are really well-represented in that market. Of the top 15 OEMs that have more than 70% of the market in China, nine are Visteon customers today. And of those nine, it's about three are domestic OEMs. At the same time, it's a very competitive market. So there has been a lot of price based sort of war that is being fought by OEMs. And at the same time, the OEMs have to keep their cockpits competitive. So we continue to see opportunities, but we have been very prudent in terms of where and how we want to engage because we want to make sure that we have a profitable business there. So our strategy has been to grow more with domestic OEMs and also to grow share of the wallet with the OEMs that we are currently present in China. Now European and American OEMs have done a little worse than, let's say, the Japanese. And of course, the domestic OEMs have taken a lot of market share. So we have a strategy of working with the ones that we think are going to do well, but it's going to take a little bit of time for us to recover from what has happened this year and we expect in a couple of years to see growth return to that part of our business.

That's all great color. Thanks for jumping in there, Sachin. I'll leave it there.

Thank you, Luke.

Our next question comes from the line of Joe Spak with UBS. Your line is open.

Thank you. Good morning, everyone. Sachin, maybe you could just sort of provide a little bit of color on what you're seeing out there from your customers because it looks like you're implying your customer production is down maybe mid-single digits in the fourth quarter. We just had another supplier report some pretty dire volume for the fourth quarter, like minus 9%, including significant deterioration in Europe in the fourth quarter. So just want to better understand what you're seeing.

Yes, absolutely. Thanks, Joe. And the first thing I would say is at this point, our outlook for the fourth quarter is really relying more on the direct orders that we have from our customers. And as you can imagine, given all of the announcements that have been made, we have been very diligent in terms of checking for integrity of those orders and we feel pretty good about where we stand. So having said that, we do see softness in Europe. There's no question about it. But our performance in Europe is driven more by new product launches. And if we were not to have those, I believe we would have seen a similar drop in our outlook for production as perhaps some others might have been referring to. So, as you know, we had a high number of launches even in Q3 and many of them were actually in Europe. And that's benefiting us. From a production perspective, if I look at the various regions for Q4, we see pretty much, I would say, a reduction in all regions except our customers in Americas. And so, Americas seems to be doing relatively well, is holding up pretty okay. All of the regions are a bit, I would say, on the negative side, including Europe. And our performance is totally driven by new product launches. So we see a market outgrowth in all regions except China. And in China, we see more of a flattish performance relative to Q3, even though there is a seasonal uplift in production anticipated for Q4, we would probably be, I think, prudent in not assuming any benefit from that. There might be some tailwind, but we're not assuming it in our outlook for now. Hope that gives you some color.

Yes, no, that's helpful. I guess the second question and it's sort of a little bit bigger picture, but I just wanted to understand the types of conversations you're having with your customers and how this could affect future sourcing because Qualcomm, for instance, a new release of some auto product this past week, and I know you use their product a lot and there was a big step up in performance that allows AI, etcetera. But if that product is out now, right, it's probably not getting to vehicles in '26 or so to maybe '27, but it also seems like the pace of development on the hardware side is really inflecting. And so, I'd venture to guess that like a year from now, there's another huge leap in performance. So how does that -- when you go to your customers and have that conversation, like how do they think about that? How does that impact your sourcing because things seem to be moving so quickly and accelerating and you don't want to get caught with outdated around tech, I guess.

Right. Right. No, that's a great question, Joe. And let me try to answer this this way. So AI, as I mentioned in my prepared remarks, is really what's going to drive a cycle of content growth and increase in the cockpit, in particular, but it's not going to come for free. So there is a pretty big step up when you go to the newest and the latest and greatest silicon that is actually capable of supporting AI models. And so, therefore, that's not going to be applicable or affordable by all segments of the market. So what we're seeing here is more of a separation between, let's say, the premium luxury end of the market, which will have to compete on all of these features that we just talked about, right, AI, not just in the cockpit, but also in ADAS and connected features, more and more camera-based vision processing and features related to that. So that's all good, but that's really more in the upper end on account of the significant uplift in the price of these silicon, in particular, which then impacts the overall system. We are talking about a 2x or 3x increase in price, right, not a percent. So that also is causing a need for having more competitive, more feature rich, not necessarily having all of the bells and whistles in AI, in particular in the lower part of the market. And this is going to be a big opportunity for us because we have existing solutions, existing platforms that we can bring to these OEMs. And it's not just in passenger cars. We are starting to see this interest come in commercial vehicles. Very similar to what we see in cars in terms of features and content and, to a lesser extent, in two-wheelers. Although in two wheelers, the volumes are higher and the time to market is shorter. So in general, I see a sort of a segmentation of tech that follows kind of the segmentation of vehicles that we have known for a long-time. And the key is going to be to have solutions that are appropriate for each segment and even for, say, two wheelers and commercial vehicles that are specific and unique to that -- to those parts of the industry. And that's what we've been really trying -- we've been focused on doing. Part of this is to have a vertical integration strategy, right, because that's what helps us drive costs lower and make the systems more affordable. We can take it to a greater extent in software and in displays, to a lesser extent when it comes to silicon, but all of that helps. And I think that also helps separate and differentiate Visteon.

Thank you.

Thank you.

Our next question comes from the line of Mark Delaney with Goldman Sachs. Your line is open.

Hi, yes. Good morning and thanks very much for taking my questions. First, I was hoping to better understand the key puts and takes behind the updated EBITDA outlook for this year and what's allowing a slight increase to the EBITDA guidance even on slightly lower revenue? And perhaps more importantly, as you're seeing some of the progress the company is making within margins, is there anything episodic helping that's more temporary in nature? Or is this perhaps a sign of progress toward the medium term target of 13.5%?

Yes, thanks. I would say, generally, we've been running pretty well ahead of targets on the margin side. And we saw that in Q2 and we saw that again in Q3. And that's really the fundamental reason as to why we are increasing our full year guidance on the margin dollar, but as well margin percentage standpoint. Despite a slight reduction in volume for the full year, we're able essentially to have better engineering cost. We are pretty much keeping our engineering percentage as is for the full year. And obviously, with lower sales, that implies lower dollars. And we've been as well running well. In terms of efficiencies, operational performance has been good and that's another reason as to why we're able as well to improve our margins. So 12.2% is the number we are putting out there for the full year. It's essentially very much in line with what we've achieved in H1, and that's a very good run rate as we go into next year. So apart from the commercial items that I indicated impacted our financials in Q2 and it was not a very large number. It was 50 basis points of margin at the time. I don't see any major item that is temporary as we go into next year. Obviously, next year, we'll have a lot of puts and takes and we'll talk about that in February.

Yes, thank you for that. My other question was around BMS and one of your key BMS customers spoke recently about a future plan to shift some of their cell manufacturing away from pouch toward prismatic cells. Hoping to better understand if there's any implications of that for Visteon and your BMS business there. Thanks.

No, great question. And, Mark, what I would say is Visteon is one of the few suppliers, if not maybe the only supplier of BMS that actually has a BMS design that is agnostic to the form factor or to the chemistry of the battery cell. Now this is something that needs to be understood carefully because most BMS systems are designed to work with a specific cell chemistry and we took a platform approach. This is part of what we do here for all of the product lines and that platform approach meant that we had to design our BMS to be able to work with different form factors, different chemistries of the cell and, therefore, it requires no change on our part to support this transition or eventually, for example, they were to -- they were to go with, say, solid state batteries, it would still allow them to go through that transition without needing a change with the BMS. So that's a unique and a key differentiator that we offer to our customers.

Thank you.

Thank you.

Our next question comes from the line of Colin Langan with Wells Fargo. Your line is open.

Hi, guys. This is [indiscernible] filling in for Colin. My first question just on the restructuring. You guys have been one of the cleanest suppliers on restructuring really this decade. I just wanted to see if you can give a little bit more color on the actions you took and maybe if you can quantify the savings you expect to see?

Yes, good morning. I'll take that question. Maybe stepping back on our footprint, we've -- as I mentioned earlier on, we've got a pretty good footprint, but we're always looking for further improvements. We also want to ensure, especially with the acceleration of the technology changes that we are rebalancing our resources, in order to meet the need of the businesses. So the restructuring plan that we've put together in September is essentially achieving that. It's as much a cost improvement that it is a rebalancing of resources. And for example, in Asia, we've mentioned earlier on some level of restructuring in China. We are then reinvesting some dollars in other area like rest of Asia as we want to grow two wheelers or some very specific customers in Japan. So it's really as much a cost at play than it is a rebalancing of resources.

Great. Thank you. And my second question, you guys called out some potential strength in Q4 in North America. My question is the D3 of their inventory is rather elevated. Do you guys have any downside risk to D3 production in Q4 factored into your guidance?

Yes. We do have a good visibility at this stage for the full rest of the quarter. So I would say it is largely all factored in, short of something that is dramatically different that might happen in the next few weeks, which we do not foresee. So the answer -- the short answer is yes. It is factored in.

Great. And then just maybe one last one. On the share repurchases, I think you've done $20 million year-to-date versus $76 million last year at this point. Do you expect to see a rather dramatic pickup in Q4?

So we've generated a pretty strong cash flow this year. And in the last 18 months, we've been very focused on share repurchases. We have this quarter focused on M&A. What we want to achieve overall is a fairly balanced approach in our capital allocation. We've -- out of our $12 million of share repurchase authorization that we got last year, we've purchased so far $126 million. So we've got some room and we are very committed to continue to repurchase shares as we go forward.

Great. Thank you for taking my questions.

Thank you.

Our next question comes from the line of James Picariello with BNP Paribas. Your line is open.

Hi, everybody. Can you just provide any clarity on what Visteon is seeing within the competitive landscape for SmartCore? It seems there are more-and-more Tier 2 and 3 suppliers trying to vie for the cockpit domain controller as OEMs consolidate their vehicle architecture. How important is it for Visteon to win this hardware specific to the domain controller and just the -- a better understanding of the interplay of SmartCore and your digital instrument clusters business. Is there sort of a zero sum game emerging between the two? Thanks.

Yes. So good question. And again, I'll go back to what I said earlier about how we see the market segmenting with respect to technology, right? We tend to normally think of these as zero sum, but the reality is that the technologies start at the upper end of the market and then they migrate down to the mass market. And it's not a very homogeneous environment out there in terms of where things stand today. So what has happened is domain controllers make a lot of sense at the mid to the upper end of the market because it allows you to put more processing power and therefore drive more software defined features inside the vehicle, mostly in the cockpit, right? Now what has happened as we just talked about earlier is that AI is starting to impact that, which means that there's even further segmentation within the cockpit domain controllers where you would have a class of those systems that are AI capable versus your normal cockpit domain controller, which offers still much higher compute than a discrete digital cluster and a discrete infotainment. So if you think about this three step approach, we are seeing growth in all three segments of this product, as I just described. So it's not at all a zero sum game. Number two, the complexity in terms of technology just grows exponentially because although we talk about it as just maybe hardware capabilities, it is attracting a ton of software at every stage of the step. And therefore, if you do not have the full portfolio of capabilities that are part of your platform already, integrating all these various technologies from third parties and making it all work is a nightmare. That's what has been really the reason why if you just think about all of these OEMs with all this immense investments that they've made in trying to bring that in house, it hasn't really worked is because they haven't built that platform. So I'm not going to comment on who are the emerging competitors and so on. All I'll say that is that we do not see a lot of new competitors emerge. We still have the same set. And given within that, it's getting increasingly challenging to be able to execute as a -- in a single supplier. So we do see, as we go forward, more of a collaboration between this -- the tier 1 supplier, the OEM and some technology partners that bring more and more of all of these other technologies that I mentioned, mostly software, and that's going to be the approach for the upper end of the market. For the mid and below, it's going to be more business as normal.

Yes, that's super helpful. Appreciate that. And just my follow-on, and apologies if I missed this, but can you provide -- shed any light on the German acquisition you made for roughly $50 million, which is half of I think the intended target of $100 million type of bolt-on pipeline. What the benefits are of that business? And in the absence of the other $50 million or so toward M&A, should we assume buybacks, returns? Thanks.

Yes. Let me address that first and then I'll also invite Jerome to talk about the buybacks in maybe a little more detail. So the way we look at how and where we are at in the industry with the various technology trends impacting it, the last five years were years of digitalization and connected car. And the next five years, we believe, are going to be more driven by software defined and AI defined vehicles, as we just discussed. Right now, our strategy is to make sure that we are in a position to lead through technology and offer all of the key capabilities required to build these platforms. As I mentioned, if you do not have those capabilities, you cannot hope to catch up and this trend is accelerating. It's not even a stable or let alone slowing down. So we have been continuously looking at the make versus buy decision on various technologies. And we do a lot of make ourselves, okay, and that's going to continue. For example, we just launched our vision based -- surround vision based technology for integrating multiple cameras in the CDC. We are one of the very few that can do that today at even the entry price point of the market. Now that was done in-house. Now at the same time, we are looking at opportunities where we can acquire specific capabilities and strengthen our technology offerings. And this company that we bought, it's a small technology company based in Germany that focuses on connectivity and e-mobility technology. And today, they are engaged with German OEMs supporting their technology development needs. They have deep expertise in that area. And it helps us, as I said, strengthen our capabilities and maybe plug a few holes that we may have. On top of that, it enables us to engage in services engagements with OEMs because they're also trying to figure out what are they going to do in those areas beyond what they currently have defined for the next generation cockpit. So what we are starting to define or refer to as outsourced R&D services that we think is a very exciting area of potential growth opportunity for Visteon.

Maybe, Sachin, just to comment on the share repurchases versus M&A, we want to keep it very balanced overall and we'll continue to look at acquisitions. But in the short term with the cash that we've generated, we should be able to do both, continue to look at acquisitions while doing some share repurchases.

Our next question comes from the line of Edison Yu with Deutsche Bank. Your line is open. Edison Yu with Deutsche Bank, your line is open.

Want to see if we can take another one.

We'll move on to the next caller. Next question comes from Shreyas Patil with Wolfe Research. Your line is open.

Hi, thanks so much for taking my question. I just wanted to follow up on the commentary around displays. You mentioned that in the next couple of years, you could see that grow to about the same size as your clusters business, which would be quite a significant amount of growth. And just thinking about how can you -- how to frame your current market position in displays, any color on the kind of margin profile that you have in this business? Is it relatively in line with the corporate average, so more like 14%, 15% gross margin?

Yes, I would answer that first. Absolutely. I think the margins there look very good. And the way I would look at our displays different from maybe some other products is that it has lower software content, but it has a lot of the other value adds that we do that is driving margins. What we're seeing, Shreyas, is that the value of displays that we are doing, especially for the premium and upper end of the market is significantly higher than, let's say, the ASP of a digital cluster and that's really what's going to drive a pretty rapid growth in our displays revenue. It depends to a certain extent on our how successful some of our customers are with their electric vehicle launch and production, which, as I've said before, we do believe that we are entering into this our timeframe where, say, '26, '27 the state and federal mandates here in the U.S. and also in Europe with the emissions are -- the step up that is being required is going to drive more sales of those vehicles and that's going to also pull this content more. So we have a fairly high number of new product launches around displays. The value is higher and we are pretty -- feeling pretty good about the growth profile there.

Okay, great. And then wanted to just touch a little bit on the topic that came up earlier around the competitive landscape, broadly maybe focusing on China, in particular, we do see a several cockpit electronics players in that market. In areas like displays, clusters, cockpit domain controllers, they seem to be pricing their products quite competitively while still generating decent gross margins and growing volume. I'm curious what you're seeing from a competitive landscape in China. And do you see risks or are you seeing any expansion of those players into markets outside of China?

Yes. So let's talk first about what's happening in China, right. And I mentioned that we have been pretty, I would say, disciplined about how we go about the opportunities there. Because of the pace of change of technology adoption being very rapid, what we see is that, very often, those OEMs are replacing those electronics faster than what would be good for returns on that business. So we do not really see -- even if the margins may look good, on paper that the frequent changes are not driving profitability with most of the suppliers. If you look at many of the suppliers there, most of them are not profitable. Or not sufficiently profitable. So that's the issue there. And now at the same time, if you look at the cost structure of these, we feel we are competitive with anybody. We have never seen that we somehow are at a disadvantage when it comes to cost. Now pricing is a different matter, but from a cost viewpoint, we are extremely competitive. So that's the other point. Now as far as those suppliers coming to outside of China, we will naturally see some suppliers come as the China OEMs also start to export more. As you know, 20% of the vehicles produced in China are exported. But we have a very good footprint already. In fact, that's one of our value propositions to Chinese domestic OEMs is to be a partner to them for their business outside of China. And we do not see that there would be any different in terms of being a competitor to the ones that we have today outside of China. And at the end of the day, we have to be able to live on our own competitive capabilities, which we feel good about.

This concludes our earnings call for the third quarter of 2024. Thank you for participating. You may now disconnect.