Vitesco Envisions Increased Localisation; Sees Post-Pandemic Growth

Vitesco Envisions Increased Localisation; Sees Post-Pandemic Growth

Interaction August 2020 Vitesco Increased Localisation Post-Pandemic Growth
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Vitesco’s focus is on powertrain technologies, both ICE and electric, which is where it expects the future to head towards

Continental is a top global supplier of technologies for the automotive sector, and has offered multiple solutions around body & chassis, vehicle electronics, safety, engine management and emission control, among others. The company recently carried out an organisational rejig, which created a new offshoot called Vitesco, which focusses on powertrain technologies alone. Auto Tech Review spoke with Anurag Garg, Managing Director & Country Head, Vitesco Technologies India, on the company’s vision, the pandemic environment as well as future opportunities that could arise post-COVID-19.

PANDEMIC SITUATION, LOCAL OPERATIONS

Garg agreed that the pandemic has definitely affected business to some extent. The plant situated at Pune, had been shut for two months since the end of March, and has still not begun functioning at full capacity. The re-lockdown of the city of Pune has also led to some form of hindrance, especially due to the limitation of movement and travel of employees.

The greenfield plant in Pune had its ground-breaking in January, and is currently functional, but is expected to be fully-operational by the end of 2020. This plant will produce components for two-wheelers as well as four-wheelers, especially focussed on BS 6 technologies and solutions. Garg said the plan is to carry out a higher level of localisation for the company’s BS 6 products, which are mostly imported into the country. The initial products that will be localised will revolve around two-wheeler components for current and future emission norms. Vitesco is ramping up operations at this facility, which was affected severely by the pandemic manly due to the supply chain issues.

The product lines that have been majorly localised include engine management systems (EMS) for two-wheelers, with others like NOx and high-temperature sensors for four-wheelers beginning to be localised at present. Vitesco is also in the process of setting up lines for production of two-wheeler catalytic filters. The products mentioned are currently being imported by the company for its customers from its various global manufacturing facilities.

ELECTRIFICATION

The vision of Vitesco is ‘Electrified Emotion Everywhere’ and this shows that electrification is a key direction the company is taking. However, since the company originally comes from the internal combustion engine (ICE) technology, it has established products catering to electronic controls, air & fuel management, combustion aftertreatment, transmission and thermal management. Therefore, the company’s portfolio is limited to ICEs, with a few catering to electrification.

According to Garg, the focus going forward will be on electrification. The Indian EV market is dynamic in nature, and Vitesco may be looking at bringing in localisation of EV components in times to come. The EV segment is growing at a slow pace, and Vitesco intends to have localised electric powertrain solutions when the market requires more of these solutions, Garg pointed out.

The automotive industry in India is currently at BS 6 emission norms, and will move next to Real Driving Emissions (RDE), followed by CAFÉ norms in 2027-28. The implementation of CAFÉ norms will see more OEMs moving towards electrification, Garg observed. He said the Indian EV market will see two- and three-wheeler adoption first, followed by passenger cars, and Vitesco will aim to supply components for all these segments. Two-wheeler electrification could constitute about 25 % of the segment and 10-15 % of the passenger car segment by 2030, he noted.

INDUSTRY, TECH ROADMAP

The month of June 2020 has seen the Indian two-wheeler market improving drastically, when compared to the previous couple of months, with the passenger cars segment following slowly. Garg said the country is expected to have a fast ‘U’ shaped recovery. The upcoming festival season should also trigger some recovery, leading to visible improvement over the next two quarters for the overall automotive market. Two-wheelers will have a higher rate of growth, followed by passenger cars, he noted.

Vitesco’s parent company Continental has its Tech Centre India (TCI) in Bengaluru, which works closely in conjunction with other R&D centres across the globe. The company also has local tie-ups with academia, like the collaboration with IIT Madras and other institutions, to work together on certain newer technologies. Garg said there are changes taking place in the market, which requires newer skilled workforce. The company also supports with the creation of curriculum for institutions with regards to courses that have a good potential for the industry.

CONCLUSION

The company was looking at increasing headcount at the TCI as well as real estate expansion. However, the current times have shown that working from home can also enable increased employee recruitment, without requiring additional physical space. Work from home is also bringing in good levels of productivity when supported by appropriate infrastructure, while also helping companies to reduce costs, Garg signed off.

TEXT: Naveen Arul