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
Pietro Gorlier and Saju Mookken

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. 

Pietro Gorlier

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.

 

Saju Mookken

Tags Magneti Marelli autonomous cars self driving connectivity Volkswagen FCA GM Mazda AMT hybridisation Tata Motors Maruti Suzuki


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Pietro Gorlier and Saju Mookken
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Magneti Marelli CEO and Country Manager & Managing Director, Magneti Marelli India