Interview with Pietro Gorlier and Saju Mookken
Magneti Marelli CEO and Country Manager & Managing Director, Magneti Marelli India
Date:
24 Mar 2017
| Author: P.Tharyan, Editor, Motown India
You supply Automated
Manual Transmissions (AMTs) to some leading auto majors in the country. Has this technology evolved big time in
India?
Pietro Gorlier (PG)
: AMT is a great solution for automation of the gear box, particularly for a
market like India where the price point is very important. We see a couple of
possible evolution points for the AMTs. One is the continuous development of a
solution to reduce the cost of AMT to make it even more competitive. We have
then the evolution of the technology into the dual clutch transmission that is
possible as the next type of transmission when you want to grow into the
automatic gearbox space. Last but not least is hybridisation of the automatic
gear box, i.e. applying 12 volt motor that provides a form of hybridisation of
12 V or 40 V depending on the type of power you want to use to make the
transmission more hybrid and also to contribute to new emission targets that
are there in all markets, whether it is Euro VI in Europe or Bharat Stage (BS)
VI in India. We seen an evolution of the
transmission, but we still think it is a very efficient way to provide an
automated transmission for markets like India.
Which are the
companies you are in talks with for your AMTs, besides Tata Motors and Maruti
Suzuki?
PG: These are the
two companies we are in discussions right now on the evolution of the AMT.
Saju Mookken (SM):
We are also talking to other car makers. When the automation of the market is
increasing, as you see three years ago there was around 2pc automation in the
market, now with the AMT coming in, the automation pace has increased. With
this, many of the automakers in India, apart from the names you mentioned, are
also discussing with us eventually to introduce the product in their cars.
PG: We do not
disclose names of our future customers, except our current customers. You need
to consider that our powertrain business is spread across almost every OEMs,
and outside India we have cooperation with names like Volkswagen, GM, FCA,
Mazda, to name a few.
What is Magneti
Marelli’s outlook on the future of powertrains especially as electric vehicles
are beginning to become popular worldwide?
PG: With the
future emission limits some sort of electrification of powertrain will be
required. We see probably an increase in hybrids, but together with that
development of some full electric vehicles. Every OEM seems to be working on
this dual strategy, starting with mild hybrids. What is important is that the
price point of electric vehicles will be relatively high for the next five to
ten years. There is still a lot to be done in improving the emission of
conventional engines. For instance, the high pressure injectors (GDIs) improve
emissions in these engines. The growth
for diesel engines may plateau but I do not see them disappearing.
Globally your
revenues stood at Euros 7.9 billion in 2016. How much does India contribute to
this?
PG: India is a
strong asset in our group. We have worldwide 86 production plants, of which 12
are in India. That is a strong sign of our commitment in this country. Our
revenues in India is around Rs 1500 crore (15 billion). We have a solid plan to
improve this revenue at a significant pace. In 2016, the revenues grew 10pc.
That is a good improvement, but obviously we plan to keep on growing. The
proportion to our global sales is small but you need to consider not just the
proportion in terms of revenues but the content in terms of vehicles. The
average cost of cars in India as compared to the average cost of cars in the rest
of the world is significantly different. For example in Europe and North
America, we supply full LED lamps, GDI injectors, high powered electric
engines...so these we do not produce in India. For our presence in India for
the last ten years, since 2007, it’s a good start here. My predecessor had said
that we want to triple our revenues from where we were in 2015.
SM: The first
manufacturing plant was commissioned here in 2008. We put up the plants here
step by step. From this perspective, it’s not that all our plants were there
from 2007-8.
What is the scope of
exports out of India?
SM: For different
business we have different levels of exports. For example in electronics, in
engine control units we produce out of India and export it to different parts
of the world. In shock absorbers, we supply directly into Europe and US.
Exports from business to business vary. A significant part of business is
exports. Obviously the plants here are made first for Indian market and support
some export where it makes sense.
PG: We have
established our presence in India to support the Indian market. But when we
have an opportunity, we export. But the main target is Indian market. It is
also part of our strategy of having this local presence to be able to provide
support to our customers where they have their production plants.
What are currently
the major global trends when it comes to technology related to vehicles whether
it is pertaining to power trains, connectivity, autonomous driving , etc?
PG: There are three mega trends in the automotive
market. One is the progressive electrification of the powertrain. The second is the connectivity of cars. The
third is the trend in autonomous driving. First of all, it is important to
realise that sometime when we talk of the three trends, we tend to look at the
extreme band of the chain. When we talk of autonomous driving we talk about
level 5, or a car fully autonomous without a driver. When we talk of
connectivity we talk about cars being connected with each other. And when we
talk of electrification of powertrain we think about full electric vehicles. We
are at the first couple of stage when it comes to evolution of these trends.
Connectivity, for example, has two type of drivers. One is the user experience. The need to
provide services to a customer inside the car is important. The way you do this connectivity is an area
where there are a lot of different choices.
The solution for the Indian market could be slightly different from the
US market, for example. You can provide connectivity to your phone, to car play
etc. But as proceed to level three and four of connectivity, we begin to have a
significant level of autonomy in the car and more your connectivity becomes
important. So the two mega trends
converge, I do not think India is ready for autonomous driving. But as the
levels of connectivity increase where cars can communicate, you need a lot of
information like receiving information from satellite on traffic information,
information from traffic signals, etc Thus the two mega trends will merge based
on the maturity of the market.
You have the vision of Tesla on one end which is completely
at the extreme spectrum, then there are a lot of intermediary visions that are
trying to bridge the gap in such trends. These are moments of high investments
for everyone.
Is cyber security
also going to an important area for Magneit Marelli to tackle while developing
new products?
PG: Cyber
security is becoming one of our business propositions. We have developed a
local solution for cyber security but most important cyber security is very
complicated as it relates to the architecture of the car. You need to know where to protect the car. We
have developed a sort of programme to support customers in defining where to
put the firewalls and create a cyber security.
You cannot develop products without providing cyber security. But it
also depends on how much the car is connected.
Is the AMT business
driving maximum growth for you in India?
SM: We started
our journey with the first joint venture with Maruti Suzuki. That’s where we
produce the engine control unit. AMT has
been a big boost. A few years ago there were not AMTs in the market and now are
already hitting a very significant number when it comes to AMTs. We would be in the range of around 200,000
units of AMTs per annum for all companies. Globally there are a few players in
AMTs, but we are the leaders and we also have the first mover advantage. We
have localised the product at the right time.
What are the
advantages that India offers for the success of Magneti Marelli business?
PG: We have two
R&D centres in India and we have around 500 engineers here. We have been
growing constantly. India for us is also
a very important hub when we have crash programmes where we develop something
in two different in two different locations and we can do our 24X7 work wherein
we work in Europe, US and then we pass it on to India. This is becoming a very
important asset for us. With a highly qualified engineer base here in India
speaking English, so it is easier for communication.
Can you throw some
light on your activities in the motorsport arena?
PG: Motorsport is
important because it is an area where we do a lot of developments of the high
end. I think our highlights of the moment are that we are the unique suppliers
for MotoGP of the ECU. It was the decision of Dorna to take a decision to provide
everyone the same ECU. (Dorna Sports is
the exclusive holder of all commercial and television rights relating to the
MotoGP World Championship). In Formula One we supply components to some of
the teams like Honda and Ferrari. We provide all the telemetry to Formula One. Motorsport
is a developing ground wherein we work with top notch engineers. Last year we
launched the high speed camera installed in front of the driver that takes high
speed pictures and is mainly used in case of accidents to gauge the situation. Our
first hybrid development was for Ferrari, the KERS of F1. From there we used
some of the technologies in production vehicles.
