‘Continental’ shift: Focus to strengthen presence in India

Chennai

In an interview to DTNext, Prashanth Doreswamy, Country Head - Continental India and MD, Continental Automotive India, talks about the company’s India vision going forward.

Fresh investments in India
In India, we have been growing 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. This will be for capacity increase and greenfield projects in India. We also plan to increase our headcount in India from the current 8,000+ to 10,000, covering all our various businesses in India. We have been increasingly focusing on localisation of products that help the automotive market address legislative requirements.

In 2016 a new assembly line was started for ABS and ESC for passenger cars and later ABS for two wheelers, at the existing Continental Automotive Brake Systems plant in Gurgaon, Haryana. In 2017, Continental expanded its existing plant in Manesar for Wheel Speed Sensors. This year, we announced a new line for the production and assembly of Electronic Control Units (ECU) for two-wheeler and passenger car Antilock Braking System (ABS) and Electronic Stability Control (ESC) in the Bangalore Central Electronics plant. Our in-house R&D center Technical Center India (TCI) has also been growing during this period. In 2015 we made a large investment for a new and larger facility for TCI, and this included eight state-of-the-art labs. Today TCI employs over 3000 engineers.

TCI’s contribution to Continental’s global business
Continental India, besides its production facilities, also contributes to the corporation’s global R&D footprint, with active R&D carried out by both the business units present in India and at TCI, set up in 2009. TCI 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, and highly sophisticated technologies for domains such as Advanced Driver Assistance Systems. At Continental, AI already plays a key role in areas ranging from software to manufacturing, and TCI has in turn focused on developing this competency in-house at Bengaluru, to support global projects in the areas of safety and connectivity. It is our aim to further grow local competence in AI, not just through hiring, but also by leveraging the ecosystem through relevant partnerships.

Chinese dumping of radials in India
Implementation of GST and imposing the anti-dumping duty on tyres from China has given a boost to domestic tyre production. Import duty on all the tyres have been raised recently from 10% to 15%. The cumulative effect of above has diluted the price competitiveness which Chinese tyres used to enjoy. In fact, the Chinese imports have come down to less than 50% of what it used to be till last year.

Sourcing strategies for rubber
Within the last years, globally we came to a strategic decision to strongly increasing our activities in our supply chain to achieve sustainability for natural rubber. We started research projects and conduct pilots in the field to learn more about the challenges and opportunities related to sustainability. We are founding member of the recently launched Global Platform of Sustainable Natural Rubber (GPSNR).

The localisation of product relates to the topic traceability from the processing plant to the farmer, which are mostly smallholders in a complex supply chain. At the GPSNR we will work together in multi-stakeholder approach to establish standards for traceability in the natural rubber value chain. To date traceability is limited to project pilots and we plan to target on achieving full traceability in our entire supply chain. Implementation details and timelines as well as potential price impacts can be estimated once the GPSNR has agreed on standards.

Catering to EV segment
Globally, the transition from combustion engine to e-mobility will massively pick up speed only after 2025. We see growth for the combustion engine as well during this time. For India, technologies need to be upgraded, and more investments will be required for the same. Schemes such as FAME will drive the uptake of these vehicles. We are strengthening our electric drive systems business globally. Our research is focused on high-voltage battery charging systems, future battery cell technology, and powertrain efficiency increase with connected energy and thermal management, as key elements of future mobility.