And we cast the net very wide to make sure that we had enough lines in the water, if you will, to incubate the growth that we wanted to experience long term. I will state very confidently, I’m certain now electrification is that future and we are narrowing our investments to that. Now, we’re very fortunate that two of those three opportunities we pursued were meaningful opportunities in terms of the development of the market. But when you look at the fact that in 2023, $700 million of our business, or 17%, was electrification, the success we’re achieving has really dictated the direction of the strategy. We have the capabilities to serve our customers there. They need our help, and that is the future for the company. Now the core business will continue to be very relevant, but we need to focus the strategy in that area around electrification, and you can see it in the revenue growth and the new business wins that we’re experiencing.
It’s painful to manage through a restructuring of businesses that are seeing very significant opportunity, but that is what strategy is all about. It’s picking and choosing where we need to invest. We’ll continue to be very committed until we find out where we want to go with the INSIGHTS business, but our investments need to go towards strategy, toward the electrification area. Thanks for the question.
Jacob Sayer: Yeah. Thank you, Samik.
Operator: The next question comes from Steven Fox with Fox Advisors. Please go ahead.
Steven Fox: Hi. Good morning. Jeff, I was wondering if you could just dial in on your expectations for electrification for 2024. You’re thinking on growth versus what kind of market expansion you’re expecting and also how those margins within that pool of products is advancing this year and its influence on the overall margin? Thanks.
Jeffrey Cote: Yeah. So, let me start with the last part of that question, which is around the product development. We have a very strong portfolio of opportunities to go to our customers, and high voltage contactors are the core of that. But it’s much broader. It’s current sensing. It’s isolation monitoring. It’s other aspects of sensing, if you will, or electrical protection that is necessary in order for our customers to go through this transformation. And by the way, there’s an accumulation of all those components in the form of battery distribution units and other subsystems that we’re getting pulled into, that are very meaningful from an average selling price standpoint that is propelling the growth as well. But it’s at that core component level where we have the expertise, and we continue to build on that organically with the joint venture with our partner in China around Churod technology.
So, there’s different types of technology and product capabilities that are necessary in the different markets around the world. So, we built out a really nice portfolio to be able to serve that market. And again, it’s demonstrated in the form of the magnitude of the new business wins that we’ve experienced over the last several years. And that’s been growing during that period of time. In terms of the overall development of the market, if we go back five years, I think with penetration rates that we’ve experienced in 2023 of around 10% penetration in North America, somewhere around 16%, in Europe and in China, around 35%, those are meaningful penetration rates of electric vehicles. Today, there are over 230 models in China of electric vehicles.
And that’s the reason why there’s higher penetration there, because they’ve invested ahead of the curve and they have so many different options. So the penetration may ebb and flow a little bit with regulation and different things that happen, consumer acceptance of it, but the ship has sailed on this. This is happening. And so that’s why we’ve really doubled down not only in the area of electrification for light vehicle, but it’s happening in heavy vehicle and the infrastructure that’s necessary to support it. So, we feel good about it. But we’re going to watch closely as our customers make choices in terms of where they allocate investment dollars. And if some of our customers decide that they want to slow things down and spend money on a new combustion engine that’s more efficient, then we’ll follow suit and continue to serve them in that market that we do extraordinarily well.
Jacob Sayer: Thank you, Steve, for the question.
Operator: The next question comes from Luke Junk with Baird. Please go ahead.
Luke Junk: Good morning. Thanks for taking the question. The question on the outlook for the back half of the year, specifically, your expectation for revenue growth to rebound in the second half based on new and ramping product launches. And I’m just wondering to what extent you’ve injected any conservatism or haircut your assumptions relative to moderating EV growth and changing geographic mix relative to the auto piece of that ramp? And I’d be also curious if you could just parse out what is auto and non-auto related in that ramp. I know you have some things in HVAC and whatnot that are contributing as well. Thank you.
Jeffrey Cote: Yeah. Sure. So let me touch on the auto piece, given that’s a big portion of the business. Yeah, we’re looking at IHS numbers, right? So first quarter of 2024 is expected to be about 21 million, 21.5 million units. Second quarter is expected to be up a little bit by 22 million. And then in the third quarter, there’s a natural dip. It’s the fourth quarter for the automotive market. That’s up to almost 24 million units in the fourth quarter. So, that’s the data we’re looking at that would drive net down 0.5 percentage point or down 1 percentage point in terms of overall production. And then we layer on top of that, all of the details associated with the new launches that are happening. We’re building capacity. We’re bringing raw material on.
So, there’s been extensive dialogue with customers, and we learned a lot last year in terms of some of the delays that occurred to make sure that we’re really engaging much more closely with customers to understand what’s happening. And so 2% to 3% growth isn’t spectacular growth, to be honest, right? And that does not drive out growth that we’re normally accustomed to in the business. But it’s the market realities based upon the end markets, the market itself, and also the content growth that we’ll experience based upon launch schedules.
