'Global growth in electronics-backed aftermarket products is to grow hugely. There is a huge opportunity for technology solutions providers like us.'

How promising is the global automotive electronics market and opportunities for technology providers like Tata Elxsi?
Despite the slowdown since 2008, the global Automotive Electronics (AE) has been growing steadily. The AE market that stood at US$114 billion in 2008, climbed to $126 billion in 2009, $133 billion in 2010 and touched $139 billion in 2011.

The market size touched US$ 191.3 billion in 2013 and is expected to reach US$ 204.6 billion in 2014. Among other segments, the infotainment and aftermarket sectors are growing fast.

The global infotainment market is likely to expand from $20.35 billion in 2008 to US $ 33.8 billion in 2014. The electronics-backed aftermarket products market is estimated to increase to over $ 36.49 billion in 2013 from $29.31 billion in 2008. Hence, there is a huge opportunity for technology solutions providers like us.

What are the roadblocks that the automotive electronics sector and R&D face in India?
There are two types of players in India. One is Indian OEMs and Tier 1s and other is global companies which have a presence in India. This differentiation poses different challenges.

For global companies, most of the development happens in their home market. As a result, there is not much of activity coming from India. Even the captive centres of foreign automakers are mostly working for their parent companies in the US or Europe. Tomorrow if these centres start doing products specifically for India, then the automotive electronics and R&D in India will have a bigger opportunity.

The current platforms of Indian OEMs and Tier 1s are still quite rudimentary and based on old technologies where electronics does not play a big role. Now the electronics trend is catching up both with the Indian OEMs and Tier 1s in recent years. Since the past two years they have started rolling out products, which have technologies like CAN (Car Area Network).

Now slowly many captive R&Ds have started partnering with people like us and we are also working quite extensively with them either on project basis or resource basis also including doing innovations for them. This trend will continue to grow.

How is your workforce catering to the automotive electronics business and do have plans to hire more?
Two years ago, around 450 to 500 engineers were attached to its automotive-related jobs in their multiple operations centres in the places like Bangalore, Trivandrum, Pune and Chennai when the total workforce of the company stood at 2,800. But today the total workforce has increased to 4,000 employees while the headcount in the automotive business sector has more than doubled to 1,200.

Tata Elxsi is likely to increase its headcount in the automotive division by 30 to 40 percent annually and it is expected to touch 3,000 to 3,500 employees in the next five years. Currently, the company’s centre in Trivandrum ranks first among other operational centres in catering to the automotive industry.

Which other developing countries pose a challenge to Indian technology providers in the AE segment?
East European countries like Romania and Czechoslovakia. There are indications that Vietnam and Philippines may grow in the future. However, our major share of automotive business comes from the Europe, followed by the US and Japan. A whopping 80 percent of our automotive business comes from foreign countries while 15-20 percent is from the domestic market.

Also read: Tata Elxsi delivers bytes to the connected car http://bit.ly/1tC58vd