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Motorola is considering a sale of its automotive products unit, which could be valued at more than $1bn, according to people familiar with the matter.

The US electronics and telecommunications group has recently been discussing this possibility with a number of investment banks, including JPMorgan Chase. But no formal mandate to run an auction had been assigned yet.

Motorola declined to comment on the reports on Thursday.

The sale of the automotive products group, which employs about 5,000 people and had sales last year of about $1.7bn, would fit with the strategy being pursued by Ed Zander, Motorola’s chief executive, who has been refocusing the company on its expanding wireless telecommunications business.

Motorola’s mobile phone handset business accounted for more than 50 per cent of the Schaumburg, Illinois-based company’s $31.3bn in revenue last year. It has been closing the gap on Finland’s Nokia, the worldwide market leader, in recent quarters helped by the success of new stylish phones like such as the iconic super-thin RAZR.

In contrast, Motorola’s automotive unit faces continuing challenges in the US auto-parts sector which is being forced to face up to the prospect of lower vehicle production and rising costs.

The automotive unit mostly manufactures telematics products that are used for vehicle navigation and safety services, as well as the sensors used in vehicle steering, braking, engine control and other systems.

If Motorola does decide to go ahead with the sale, private equity buyers are expected to be among those who might be interested in the business.

Copyright The Financial Times Limited 2017. All rights reserved.
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