‘Chal­lenge is in Be­ing Agile to Meet the BS VI Dead­line’

This time In­dia is mov­ing two steps ahead and that is a tremen­dously se­ri­ous move

The Economic Times - - Companies: Pursuit Of Profit -

The $40-bil­lion Con­ti­nen­tal AG, Europe’s sec­ond largest auto com­po­nent maker and a spe­cial­ist in emis­sion con­trol so­lu­tions, is cel­e­brat­ing ad­vanc­ing of Bharat Stage Emis­sion Norms VI to 2020 that caused a furore in the in­dus­try about meet­ing the dif­fi­cult tar­gets in a short time. In an in­ter­view with Ke­tan Thakkar, mem­ber of board and pres­i­dent of power train di­vi­sion at Con­ti­nen­tal AG Jose Avila said the chal­lenge is to be agile in meet­ing the dead­line. Edited ex­cerpts:

Auto mak­ers have voiced con­cern on ad­vance­ment to BS VI by ’20... The chal­lenge is to take ad­van­tage of this op­por­tu­nity with agility. For us, as a sys­tem sup­plier on emis­sion and fuel econ­omy driven prod­ucts, it is a pos­i­tive devel­op­ment. We no­ticed from talk­ing to cus­tomers, this time In­dia is mov­ing two steps ahead and that is a tremen­dously se­ri­ous move. BS VI tech­nol­ogy is quite ad­vanced; it needs a lot of ex­tra equip­ment and tech­nol­ogy, which is al­ready de­vel­oped on ex­ist­ing core com­po­nents. You al­ways have to adapt it and give it the ap­pro­pri­ate ap­pli­ca­tion to meet the In­dian driv­ing cy­cle. Since the tran­si­tion is across seg­ment, it is not just car, but two wheel­ers and trucks too. In­dia is amongst top 5-7 pas­sen­ger ve­hi­cle mar­kets, the largest mar­ket for two wheel­ers, so the op­por­tu­nity is huge for us. How pre­pared is Con­ti­nen­tal? The base tech­nol­ogy has ma­tured. The is­sue is there are so many pack­ages on en­gines, ve­hi­cles, trans­mis­sion com­bi­na­tions, weight classes… so many dif­fer­ent cal­i­bra­tions. We do more of generic part, OEMs deals with more com­plex­ity. It is not the tech­nol­ogy, but the time re­quired to do so many dif­fer­ent vari­a­tion which is a chal­lenge.

What about the cost? Cost pres­sures in au­to­mo­tive mar­kets are huge, the base tech­nol­ogy ex­ists and we need the agility to lo­calise to bring down the cost. We need to en­sure that if we put up the line, it does not re­main idle. The tran­si­tion from im­port to lo­cal­i­sa­tion has to hap­pen quickly. You had dif­fer­ent man­u­fac­tur­ing lines for au­to­mated for ma­tured mar­kets and man­ual lines for emerg­ing mar- kets - this phi­los­o­phy has changed. You now do one in­dus­trial devel­op­ment and de­ploy it in a mod­u­lar form. The volatil­ity in the In­dian mar­ket is a big risk go­ing for­ward. In­stead of push­ing for big bang lo­cal­i­sa­tion, it is cost ef­fec­tive to progress in small steps.

How do you see the im­pact of Volk­swa­gen’s diesel crises on the au­to­mo­tive mar­ket? We are de­ploy­ing NoX sen­sors now, post the (Volk­swa­gen) diesel­gate it is more and more about com­pli­ance on the field. The first chal­lenge is proper ap­pli­ca­tion and in­te­gra­tion in En­gine Con­trol Sys­tem, the need to cal­i­brate it prop­erly. There is still time avail­able to ex­e­cute so­lu­tions for BS VI in In­dia. With th­ese tech­nolo­gies, the cost is go­ing to go up fur­ther and that will im­pact prices. There is a lot of pres­sure to min­i­mize the end ef­fect to the con­sumers. Con­tent will in­crease es­pe­cially with RDE or ride drive emis­sion; there will be a lot of con­tent in af­ter treat­ment, like SCR, which will take up the cost.

What is the fu­ture of small diesel cars? We have devel­op­ment of three cylin­der diesel in Europe go­ing away and the buzz word is down­siz­ing petrol en­gines be­cause fuel econ­omy is sim­i­lar to that of a diesel car. Mi­gra­tion is hap­pen­ing in In­dia too. In larger ve­hi­cles, diesel will con­tinue to have edge, but def­i­nitely smaller ve­hi­cles will have to aban­don diesel. In In­dia, any­thing above 1.5 litres will be rel­e­vant and we are al­ready see­ing smaller diesel en­gines ve­hi­cle sales de­clin­ing. For petrol, it is down­siz­ing, for diesel it is right siz­ing.

You have sig­nif­i­cant R&D pres­ence in In­dia. What is the way for­ward? We want to con­tinue to grow our en­gi­neer­ing pres­ence in In­dia. Tech Cen­tre has grown from 500 to 2000 in a very short time. We are hir­ing more peo­ple, faster than ex­pected. We will surely dou­ble our work­force on en­gi­neer­ing, how soon, it is dif­fi­cult to pre­dict. Apart from build­ing ca­pa­bil­ity to sup­port the lo­cal OEMs for af­ford­able tech­nolo­gies, pow­er­train etc., a num­ber of In­di­ans are al­ready work­ing on au­ton­o­mous tech­nol­ogy, elec­tri­fi­ca­tion sys­tem amongst oth­ers, which don’t cur­rently ex­ist in In­dia.

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