New York's ban on the use of handheld phones while driving may have the telecommunications industry in a snit. But it comes as welcome news to an auto-parts maker called Gentex.
It's not that the Zeeland, Mich.-based company - whose customers include Detroit's Big Three auto makers, plus BMW, Infiniti and Rolls Royce - is taking a stand on the merits of the controversial accident-prevention measure, which passed June 28. What Gentex senior VP Garth Deur does hope is that the anti-handheld law, which affects 6 million cell phone customers in New York state, would stimulate the market for cars with the kinds of hands-free wireless devices that Gentex has integrated into its flagship product, an electrochromic mirror that dims automatically to prevent drivers from being blinded by reflected headlight beams. The module comes with a number of features including a digital compass, alarm display, tire-pressure indicator, OnStar global positioning system and, perhaps most importantly these days, a hands-free cellular phone.
Months before the anti-handheld law passed, Gentex began laying the groundwork for an increased demand for integrated telematics and other gadgetry. With its product currently available as an option in luxury vehicles and SUVs, the company is now about to offer it in a wider range of automobiles. Starting this fall, Gentex will supply the mirror modules on three 2002 midsize sedan models, including the Ford Taurus and Toyota Camry.
Industry analysts say the 27-year-old company, which invests more than 6 percent of its annual revenues in new R&D, is adept at developing new applications that can be integrated into its mirror module and, as such, has solid prospects of capitalizing on the growing demand for hands-free wireless devices in cars. "They have an entrepreneurial culture more like Silicon Valley's than the industrial Midwest," says Russell Hensley, leader of Andersen's Automotive Competency Center (formerly Arthur Andersen). "They are a technology company that (just happens to get about) 90 percent of revenues from the auto industry." (The rest comes primarily from sales of high-end smoke detectors.)
But hands-free wireless products aren't the only feature the company is developing. Hensley views the company's development of light-emitting diodes for mirror products as another strong suit. "The use of LEDs in automotive applications has significant trickle-down advantages to the manufacturer in terms of cost," he says. That is because LEDs last longer than the standard incandescent lights used in cars and generate less heat that can destroy electrical systems.
One promising product, according to Michael Bruynesteyn, an analyst with Prudential Securities, is an LED-illuminated turn signal embedded into an exterior electrochromic mirror that serves as an additional warning to occupants of nearby vehicles in the driver's blind spot. Bruynesteyn also likes Gentex's "smart" high beam, which dims or shuts off when it detects headlights from an oncoming car or taillights from preceding vehicles, and will be available on 2004 Lincoln models.
"They have a lot of programs going on this year, and they seem to be winning more contracts," says Bruynesteyn, who believes that the company's new Toyota Camry deal would spur other auto makers to include self-dimming mirrors on high volume, lower-cost products. In addition to the growing demand for hands-free wireless in cars, Hensley points to the company's planned growth in Asian and other foreign markets specializing in small and midsize automobiles as further cause for optimism. "They've got fruitful years ahead," Hensley says. "Gentex plays right in line with the future."
