2013 Automotive Electronics Special – Interview with LokeshPayik

TT Electronics kicked off its first India facility in February. What have been the developments so far on clients, both existing and new?

For TT Electronics, India is a strategic country which presents an exciting opportunity to provide our sensing and control products to both OEMs and engine manufacturers.

Having inaugurated our new manufacturing facility in Manesar, which is about four times bigger compared to our previous location, we are continuing to support our existing customers and actively pursuing opportunities to gain new customers. For example, we recently worked on a project for sensors with a local four-wheeler customer.

We have invested £ 9 million to enhance our manufacturing capabilities in the new facility at Manesar as well as our new R&D facility in Bangalore. Our engineering centre in Bangalore hosts a 50-strong team that supports worldwide projects related to product design and development. We are looking to double that number by end of this year.

Have you been able to add more clients? Is the plan for a two-wheeler centre of excellence on track?

We have started working with new customers in the last six months and are continuing to work on new business opportunities from OEMs and engine manufacturers. Our existing European customers like Daimler , Volkswagen and BMW AG have active projects for localisation in China, India and Latin America.

This year, TT Electronics has gone through a major strategic initiative to give us a focus on the Sensing and Control area, which contributes 52 percent of our business. This provides us with a tremendous opportunity to offer advanced solutions that combine sensors and controls. Overall, it complements our plan to establish India as a two-wheeler centre of excellence. Our implementation of this strategy is on track and will result in new business in the financial year 2014-15.

TTE has also been working on programmes for Tata Motors and Daimler. What is the status now and have these developed into full-fledged orders?

Yes, TT is supplying products for the Bharat Benz range from our German location. Additionally, we have started supplying products to Delphi-TVS that are being fitted into Tata Motors' passenger cars.

Emissions are a big growth driver for auto electronics. How has TT Electronics leveraged this?

The demand for the auto electronics market is driven by common factors:

Performance:Sophisticated products incorporating more complex electronic systems, requirements for greater functionality, efficiency and power.

Regulation: Emission legislation and requirements for greater economy, safety legislation. Growth and prosperity: Rising income standards and increasing disposable income, particularly in emerging economies

We are a global electronics player supplying products to major automotive manufacturers such as Daimler, BMW and the Volkswagen Group. Our global customers have been quick to have the technology implemented with strict requirements for emission control.

We take pride in saying that we are the preferred technology partner for emission regulation and safety enhancement for these OEMs.

Also, it is heartening to notice Indian OEMs benchmark themselves against the big German players, which can be hugely influential – when, in India, we are able to reference 25 years of supplying to them.

What impact has a weakening rupee had on the local and export business?

Our long-term strategic plan for India continues to be positive despite the current slowdown and the continued weakening of the rupee. Our main objective in India is to develop and manufacture products locally and minimise the risk of currency fluctuation. As a global business, we seek to develop and maintain a diverse regional profile to balance economic conditions, like the recent devaluation of the rupee.

What are the challenges of the future for TT Electronics and its clients?

The shift from hydraulic systems to more electronic systems has several potential challenges. Hydraulic systems have inherent benefits in their robustness to harsh environmental conditions and ease of system integration but do not have the intelligence required to allow for higher degrees of efficiency and better control.

The challenge for electronics systems, which bring the capability to have smarter, more efficient controls, is in designing them to withstand very harsh environments (high temperatures, fluids) and making the integration of sensors and controls into the control system as easy as possible. Our expertise in sensors, power/thermal management and control electronics across automotive applications, means that TT is well positioned for the shift.