Business Filing
Tata Technologies and GKN Automotive, in a strategic move, have got together for emobility. A global software engineering centre is their first byproduct. It is expected to be the nerve centre for growth.
The Nerve Centre
It’s no longer about resuming prior investment plans. It’s about earmarking capital expenditures for growth and expansion. Digitisation, research and development spends and emphasis on upskilling for an efficient ecosystem are gaining prominence in long-term strategic plans. Testimony to it is the Tata Technologies Ltd. and GKN Automotive Ltd. partnership which was firmed up earlier this year with an agreement. Within three months of signing it, the two companies with close coordination got the new nerve centre up and running. The softlaunched global e-mobility software engineering centre (in Q2FY2020) located at Bengaluru will power next-generation e-powertrains (e-drives). Elaborating on the development in hindsight, averred Warren Harris, Managing Director and Chief Executive Officer, Tata Technologies, “The launch of the global e-mobility software engineering centre will help both companies expand and accelerate growth channels in the e-powertrain segment.”
Explained Harris, that the centre will fuse Tata Technology’s expertise in e-powertrain and embedded systems with GKN Automotive‘s next-generation e-drive technologies essentially comprising of an electric motor, high-voltage lithium-ion battery and a smart battery management system. With a potential to reshape the future of sustainable e-mobility, the milestone centre, according to Harris, will play a pivotal role in the development of reliable and higher quality technical solutions that create real value for customers.
The milestone
Despite Covid-19 induced challenges and delays, Tata Technologies and GKN Automotive, according to Harris, completed the 12,650 sq. ft area centre in a six months time span. “Housing a design studio and laboratories besides meeting and conference rooms, by the turn
of the calendar year 2020, the centre is expected to house more than 100 capable engineers from the present 65 experienced on Autosar and embedded software,” he said. With adequate support staff, the centre will be opened in a phase-wise manner in strict compliance to hygiene, sanitisation and social distancing practices.
At Tata Technologies, the focus is on embedded software offerings to tap the opportunities arising from autonomous, connected and electric vehicles. Recognising drive system innovation as central to mobility, the company wants to build a pool of talent with deep domain expertise, and harness it in the new centre. To bring in efficiencies, explained Harris, it will leverage the in-house manufacturing domain knowledge and the comprehensive experience of dealing with global Original Equipment Manufacturers (OEMs) and tier 1 businesses. It will also bank on the two partners’ exposure to leading European, the US and APACbased OEMs to expand globally.
On the other hand, headquartered in the UK, global technology company GKN brings to the table its end-to-end capability of developing, building and supplying advanced e-powertrains with a million electrified vehicles already onroad. Having fitted its first e-drive in a production car nearly two decades ago, GKN wants to capitalise on its partner’s expertise in electric and embedded systems besides the capabilities of attracting the top talent pool in India for the dedicated automotive facility.
According to Liam Butterworth, Chief Executive Officer at GKN Automotive, the crucial milestone is essential for accelerating growth and expansion by way of localising products in India. It’s also a stepping stone to widening the customer base. The Government of India’s emphasis on going ‘Vocal for Local’ makes it an apt time to develop indigenous world-class engineering capabilities, he stated.
The business case
GKN Automotive has commercialised e-drives for 13 electrified models from 10 global brands known to include four major OEMs. Spanning premium four-wheel-drive SUVs to an electric city car, the three-in-one e-drive system is known to package advances in electric motors, transmission, traction inverters, software and controls. Incidentally, the market for embedded systems was expected to breach the USD 86.5 billion mark in 2020. It was projected to reach a valuation of USD 116.2 billion by 2025 at a 6.1 per cent compounded annual growth rate. Even as Covid-19 is being looked at as a big jolt to the projections for the embedded systems and related components, new product development is expected to prove lucrative for companies like GKN Automotive and Tata Technologies, ready to sweat their assets for the long-term.
With the market yearning for a China plus one import strategy, the two entities continue to look at it as a strong business case. Opined Harris, “From an e-mobility perspective, we believe that the prospects have actually improved post-Covid 19 with electric vehicle sales growing rapidly across geographies. Both in China and the US, e-mobility sales have hit a new benchmark and most OEMs are accelerating the launch of their e-mobility products to meet their customer requirements.” Harris explained that the centre will be utilised for the initial focus upon delivering software to GKN Automotive which will inturn package it with their driveline and e-powertrain solutions. “We are looking at the centre as a platform for further collaboration with GKN in other areas too making it a very important milestone for our organisation,” he stated. Harris also confirmed that the centre would initially work with global customers, and over time, look at servicing Indian companies.
Q. What value additions and efficiencies do you expect to add by way of the new global e-mobility software engineering centre in the midst of a pandemic?
A. The new normal amidst Covid-19 has given rise to many emerging trends. It is critical for the automotive industry to adapt and evolve in order to meet the needs of customers. From our perspective, we see clear trends of changing customer preferences pertaining to the adoption of digital and virtual engagement, a focus on enhancing manufacturing efficiency through the adoption of digital manufacturing solutions, cost optimisation across the product value chain, re-engineering of the supply chain ecosystem and last but not the least a greater adoption of alternative propulsion system like electric vehicles across the globe.
Our global e-mobility software engineering centre in Bengaluru will leverage Tata Technologies’ expertise in electric and embedded systems to work on the next-generation e-drive technologies in order to bring in efficiencies backed by the manufacturing domain knowledge and rich expertise of working with global OEMs and tier 1s. In the current times, the Indian government’s impetus on ‘Vocal for Local’ to go global is driving our commitment towards putting India on the global e-mobility map. It entails investment in R&D and attracting the right talent to develop indigenous engineering capabilities for the world.
Q. Elaborate on the six-month layout to construction journey given the magnitude of challenges ranging from manpower crunch to execution hurdles? A. Developing an e-mobility software centre of this scale requires very granular planning and timely onboarding of qualified resources especially in Autosar and embedded software. When we started the project, the impact of Covid-19 was visible and we faced several challenges in getting the project team to develop the centre and get it up and running. However, through close coordination with our partners, we were able to get the centre up and running within three months of signing the agreement with GKN Automotive and started onboarding the talent needed to develop and deliver world-class e-powertrain solutions. From a talent pool of 30 people a few months back, we have now scaled up to 65 engineers and we hope to have 100 plus talented engineers working with us from this centre by the end of the year.
Q. Together with GKN Automotive, how do you plan to offer sustainable mobility solutions eventually with economies of scale?
A. Right from the Tata Technologies’ vision of “Engineering a Better World” to GKN Automotive’s vision “To drive a cleaner, more sustainable world through leading-edge drive systems”, both businesses are aligned towards offering solutions that pave the way for a cleaner and sustainable mobility. The launch of the global e-mobility software engineering centre will help both companies expand and accelerate growth channels in the e-powertrain segment. As the world increasingly adopts e-mobility, the centre will utilise Tata Technologies’ expertise in e-powertrain and embedded systems as well as its ability to attract India’s software engineering talent to work on GKN Automotive‘s next-generation e-drive technologies, reshaping the future of sustainable e-mobility. The centre aims to cater to the demands of future mobility and develop reliable, higher quality technical solutions that create real value for customers.
Q. Do you retain the pre-Covid outlook and strategy on e-mobility and the respective segments you are betting big on?
A. From an e-mobility perspective, we believe that the prospects have actually improved post-Covid-19
with electric vehicle sales growing rapidly across the geographies. Both in China and the US, e-mobility sales have hit a new benchmark and most OEMs are accelerating the launch of their e-mobility products to meet their customer requirements. The collaboration with GKN Automotive is an endorsement off the capabilities and skillsets that we have built over the years. This global e-mobility software engineering centre will develop software for e-powertrain systems and components that GKN Automotive will deliver to their customers. It is a significant and strategic initiative and a major milestone for our organisation.
Q. Have you backed it up with a phase-wise investment strategy? A. Tata Technologies has been increasingly focused on embedded and software offerings, in addition to our traditional expertise in product engineering. The fact that we have a ver y deep and longstanding capability and domain expertise in the automotive industr y enables us to make decisions on next-gen products balancing the importance of mechanical with our growing capabilities in embedded electronics and software. The automotive industr y is likely to undergo a sea change over the next ten years driven along three vectors: the move towards electrification, connected and autonomous driving. Tata Technologies is committed to aligning its investments in these vectors. While I can’t disclose specifics of customer projects, we are working on some ver y exciting projects across automotive hubs in North America, Europe and the APAC region. We are privileged to be involved in some of the most progressive innovations and investments that are being made towards e-mobility.
Q. Will the product design and engineering capabilities be limited to GKN’s global OEMs and tier 1 OEMs only or will you at some point want to expand your horizons?
A. Today, the centre will be focussed upon delivering software to GKN Automotive which will inturn package it with their driveline and e-powertrain solutions. It will leverage our support in the contribution it makes to its customers in North America, Europe and APAC. We are looking at the centre as a platform for further collaboration with GKN in other areas. We are also looking to capitalise the experience that we are able to gather here and make that available to our customers globally.
Q. How capable are the design studio and lab stations to aid a sustainable product lifecycle management and go-to-market strategy?
A. Our e-powertrain capabilities are uniquely positioned to support the go-to-market strategy of the target client both from a scalability and sustainability perspective. Through our product engineering services, we help customers in the automotive, aerospace industry heavy machinery verticals including helping them conceptualise, design and develop better products. Our digital offerings, on the other hand, help businesses to manufacture, service and realise better products. The synergy between our understanding of the technology as well as products enabled by the manufacturing industry is the USP of our organisation. In the technology domain, “we use what we sell, and we sell what we use” and that is a key differentiator for our company compared to traditional IT companies operating in the space.
Q. Do you expect to also draw direct benefits for the centre from the skilled resource pool you will have access to under the MoU with the Karnataka Government for upgrading ITIs? A. The collaboration with Government of Karnataka is aimed at upgrading and modernising 150 Governmentowned Industrial Training Institutes (ITIs) across Karnataka as part of the initiative to conceive and implement projects of high social impact and complement the nation-building efforts of the Government. Post-up-gradation, these ITIs will not only cater to advanced skill requirements of students as well as prospective employers but also act as technology hubs, including skill centres for the large industry as well as MSME. Those graduating from these institutes will also get preference in placement by the companies that are part of the consortium which includes Tata Technologies. However, the goal of this initiative has a much wider perspective and is not particularly limited to building the resource pool required for the Bengaluru centre.
Q. To sum it up, how do you plan to leverage the centre on a short, medium and long-term basis?
A. Tata Technologies has been increasingly focussed on embedded and software offerings, in addition to our traditional expertise in product engineering. We are known for our light-weighting and body engineering capabilities, for instance. We have a long-standing relationship with Jaguar and Land Rover, the investments that they have made in aluminium body structures has highlighted our differentiated experience and capability. As the industry moves from internal combustion engines to alternative propulsion systems, a lightweight body structure is an essential condition that is driving significant demand for Tata Technologies. So, our traditional strengths in mechanical continue to be relevant in the work that we are doing in the EV space. While that will continue to be important, we recognise that it will not be sufficient to position ourselves as a strategic partner to OEMs, leading us to invest aggressively in embedded electronics and software. The centre will initially work with global customers and, over time, will look at servicing Indian companies as well. We will continue to differentiate ourselves in the short, medium and long-term.
With Bureau Inputs