We chat with Krishan Kohli, Head of Business Unit Vehicle Dynamics Continental Automotive India, and talk about the challenge of operating in a price sensitive market and how localisation is the key to success.
With many new safety measures soon to become mandatory in all vehicles like ABS, how much of a challenge was this for Continental to manufacture these units for both two-wheelers and four-wheelers?
As a technology company with proven safety technologies and decades of experience, Continental is fully equipped to support the market needs. India being a price sensitive market, automotive manufacturers are constantly under pressure to make technologies cost-effective. Safety systems should not be viewed as premium features that come along with top-end models only. Equipping vehicles with safe technologies will certainly have a cost implication in the initial stages. But if it becomes a norm rather than an exception - for e.g. due to legislation - safety installations will increase and gradually this will bring prices down. This is how developed economies evolved over the decades in vehicle safety systems.
Localisation is another factor that is imperative to meet specific technology and cost requirements of the Indian market. Continental is supporting vehicle manufacturers in this regard, by ensuring that our technologically advanced, high-quality products are localised for the market.
Local R&D is yet another important factor to influence cost and adapt technologies for the local market - Again, another focus area for Continental.
So with the right product offering and local footprint on R&D, Operations and Sales, Continental is well equipped to service the Indian market requirements for both 2-wheeler and 4-wheeler light vehicles segments.
The key to success is localisation as a long-term strategy. What were measures taken to achieve this and apart from catering to the domestic market, how significant is the export market and where all do you export?
As I mentioned already, we are fully equipped to support the Indian market. Continental first set up a line for localisation of ABS assembly, besides ESC systems, in Gurgaon in November 2016. In January 2018 we started a new line in our Bangalore Central Electronics Plant for the production and assembly of Electronic Control Units (ECU) for two-wheeler and passenger car Anti-lock Braking System (ABS) and Electronic Stability Control (ESC).
In India active R&D is carried out by both our business units present in India and our Technical Center India (TCI). TCI, which is ramping up rapidly, today supports end-to-end product development from requirement engineering to vehicle build-up and testing in specific areas encompassing software, electronics and mechanics. An example of their level of engineering depth is the one channel ABS solution for two-wheelers. We recently announced a new facility for our R&D centre/test labs in Gurgaon, dedicated exclusively to our brake systems business.
Currently, VED India operations supply parts into the domestic market as well as Southeast Asia/ Malaysia market.
Two-wheelers segment is a very cost effective segment. How did you manage to keep the ABS unit's cost low without compromising on the safety for smaller motorcycles?
Yes, this indeed requires a lot of focus, and we believe localisation of production and R&D is certainly the key. Safety is everyone’s right. In India ABS has been perceived in the past as a premium feature rather than a necessary safety system; in fact, to some extent, it still continues to be perceived so. But if you see the recently launched 2-wheelers with a 125cc capacity engine and above, they are all equipped with ABS. Two-wheeler segment is a large market, and volume will further drive prices down.
Continental does have a solution for smaller motorcycles and scooters, a one-channel ABS called MiniMAB, which basically is a small and lightweight solution for small two-wheelers. The system prevents the front wheel from locking up, thus avoiding an accident or the vehicle becoming unstable. But we also have a larger portfolio, including systems currently in series production like Motorcycle Integral Brake Systems (MIB) and Motorcycle Anti-Lock Brake Systems (MAB - 2 Channel ABS). The two-channel ABS MK 100 MAB or three-channel MK 3-2 MAB has been available as a mid-range feature, while the MK 100 MIB has been available as an advanced feature.
Sub-125 cc two-wheelers may settle with CBS, to begin with – we do not service this segment - but going by the growing awareness and consumer demand for safety features, there will be a gradual shift towards basic ABS system like one-channel ABS in the future for these segments too.
You have recently rolled out 1 million EBS units from the Gurugram plant. Even though it's not yet mandatory, do you see the government making it very soon?
There is an increasing commitment towards safety, coming not only from the government but also from the OEMs as well as bodies like NCAP, and this is indeed great. Combined with this there is a growing awareness among consumers about the need for safety and technologies that provide safety. We are moving in the right direction and we are positive that we will see increased adoption, as well as an upgrade to higher technologies.
Continental's long-term goal is 'Vision Zero'. How achievable is it in a cost-sensitive market in India?
That certainly is our goal. We may be a couple of years behind mature markets, but with increasing awareness coupled with the right solution, both from the government, manufacturers and solution providers, we can certainly make it an achievable goal, and not a distant dream.
You've recently inaugurated a new R&D facility at the Gurugram plant. What will the new centre focus on and will it be working on both domestic and global market demands?
The new R&D facility at Gurgaon is exclusively for our brake systems businesses, both regional and global. Currently, the capabilities of the R&D centre at Gurgaon include design and testing for brake systems.
As you know we also operate a full-fledged R&D centre - Continental Technical Center India (TCI) in Bangalore - with 3000+ engineers catering to Continental’s entire Automotive business, globally. All of Continental’s Safety businesses have a large footprint at TCI.
Can your ABS units be retrofitted in older vehicles, especially motorcycles?
Currently, especially with the older vehicle configurations, ABS units cannot be retrofitted.
What is the roadmap for 2018-19?
Continental will continue to stay committed to our long-term strategy globally towards “Vision Zero.” In India, we will continue to grow along with the market and will continue to invest to meet the market requirements. Continental had recently announced plans on a high three-digit crore investment in India over the next two years, and also plans to increase our headcount in India from the current 8000+ to 10000, covering all our various businesses in India. We will continue to innovate, focus on bringing in higher technologies that make mobility safer for everyone.