Alexander Klotz, TCI Head Continental India talks about global auto megatrends, EV focus, shared mobility and future plans.

German Automotive component player Continental Automotive is working on next-generation technologies for the Indian market. Continental TCI, the Corporation’s in-house R&D center, is also on the fast lane, ramping up headcount aggressively in several technology areas. BW Businessworld caught up with Alexander Klotz, who is the head of Continental’s Technical Center India (TCI), the in-house R&D center of Continental Corporation.  During the interaction, he affirmed that Continental is transforming itself from being just a tier-1 components player to a mobility solutions provider. Below are the edited excerpts:

As there are too many megatrends shaping the auto industry, how do you look at your business model differently?

We basically see four automotive trends. Mostly, there is connectivity as all vehicles are being connected that has some implications on functions and even (on our) possible business models. Then there are (trends like) automated driving, shared mobility, and electrification. There's basically a potential disruption from each one of them.  So (the auto industry is) just going from internal combustion engines to electrification (of Powertrains).  We are also going from self-owned (concept) of buying a car to where (now) a fleet owns a car. There's also a lot of change in how the vehicles would look and the functions needed like durability (of vehicles). It's not standing in the garage a lot of time but it is driven 24/7. So from our perspective, we can't ignore any of these and we can't focus just on either one. And if you even combine them the cocktail may even get more interesting. So the fleet that owns an electrified fleet which is able to drive itself and that makes for sure it needs to be connected. But that that all together basically is an interesting used case at the end and the way how we do it is. On the one hand, there is a lot of evolution happening in the products that we have. We have been offering products and technologies aiding connectivity for more than 10 years now, of which over 30 million vehicles are connected with Continental devices. The next generation of connectivity will work on 5G grid.

How critical is the Indian business to your Asia Pacific and do you see the contributions of India going up in the medium to long term?

India is a fast-growing economy and we see a huge potential in the market. Though I will not be in a position to comment on the business figures, we have been growing at a steady pace and this is because of the potential the Indian market unfolds, and that's the reason why we have manufacturing facilities here. We have a strong focus on localization and are investing in our production capabilities. Some of the examples to support this claim are the recent inauguration of a greenfield in Pune, we expanded our capacity for Anti-lock Brake System (ABS) last year, and our production utilization is clocking full.

What role does your global R&D Center in Bangalore play in your global operations? 

Today, we are about 3,500-4,000 engineers working from Technical Center India (TCI), Bangalore, and are ramping up the headcount rapidly. Our growth in the last couple of years has scaled more than fifty percent year on year and we are forecasting more growth in the coming timeframe. Having said that, our contribution from the Automotive Divisions ranges from powertrain side to Advanced Driver Assistance Systems (ADAS), brake systems and instrument clusters.  In some areas, we are developing products and technologies for the global markets

As safety norms have just kicked in and emission norms are coming in by 2020, will you be focusing aggressively on safety and emissions rather on other components and all.

If you look at India, we already have a large focus on those two (areas) because (the) legislation is driving it. Keeping in mind our localization philosophy, our team in India took the responsibility to develop, produce and release the products in India, catering to the new market demand.. On the other hand, we are working on advanced technologies such as Advanced Driver Assistance Systems (ADAS). Though this may not be relevant for Indian market at present, but the know-how that we gather while developing products even for a mature market like Japan, it will be a learning case for India. How we can adopt it and what we need to customize for India are something that we can deliberate upon.

How geared up you are electric vehicle norms?

Firstly, just to underline we are not starting from zero. So there are a handful of products that we have such as Battery Management Systems, inverters, electric motors and axle drive system. We have innovative solutions such as wireless charging and AllCharge technology, for vehicle charging. So globally looking at Continental, one interesting move that you may have seen last year is that we carved out powertrain (division) into a separate legal entity. And the main reason for that was really we see powertrain domain being under the highest dynamics and external drivers specifically from the legislation part. When the market heats up, we would be able to take quick and agile decisions on right investments, potentially even into cell technologies. 

Globally, VW is one of the global players whom you are supplying your products for a long time. As the company is embroiled in a controversy, what has been the impact on your business? 

I reserve my comment on this subject. What I find very interesting with that there is a negative side in Europe if I may say because now the debate is not about technologies anymore. It is rather against diesel (fuel), which is bad. I hope we can go back to a solution-focused discussion

So does diesel engine have a future? 

It is not necessarily the technology that will decide on diesel’s future.  If we continue to deliberate on the negative side, it will be an emotional kill of the diesel, like in the case of USA. Presently in Europe there's a non-technical debate, despite some clear benefits of the diesel and the demonstrators that we show in real driving scenarios. In my opinion, we should not kill the technology, rather have the right discussion to figure a solution on which application can be used where.   

Are there any kinds of products or solutions that you have developed in India for global markets?

Fundamentally, if I look at India we have matured a lot over time in many products if not all. While we have been supporting some products globally, we take responsibility for the complete project application. In certain cases, we take complete ownership of the function. In short, we are globally responsible for certain functions or competencies within a business unit completely.

Lastly, what's Continental's vision for BS VI and Safety in India? What do we see Continental doing and the next stop in the medium to long term?

Continental has all the required technologies and solutions to address legislative requirements in the market and can support this in the most efficient and effective manner. We believe clean, intelligent and connected vehicles are the future. For instance, when we address the topic of safety, we follow Vision Zero I.e. Zero Fatalities Zero Injuries Zero Crashes.  This is significant because there is a huge potential and many technologies we discussed today fall under this vision. When we talk about shared mobility or hybridization, we are looking at the mobility experience as a whole and much more. That's why we have our CUbE (Continental Urban Mobility Experience), a self-driving bus. We showcased (a concept) robots for last mile delivery at CES, Las Vegas. And that is why we are persistent about fleet management solutions and the development of smart cities. This is because the future, for sure will be different as compared to the present scenario, where you have a traditional tier 1, tier 2 and an OEM.  Continental speaks for the future of mobility, that's what you see at our shows, futuristic demonstrators and all the technologies to make it happen.