The world’s sixth largest supplier’s full-fledged R&D centre in Pune will drive a host of advanced research projects for the Indian market.
When the Pune Tech Centre of Faurecia kicked off its operations in 2004, it functioned primarily as an offshore locale for supplying computer-aided designs mainly to Europe. Today, it has morphed into a full-fledged R&D centre and has opened its doors for end-to-end engineering expertise including acoustic parts design as well as product testing and validation capabilities both for India and the global markets.
Seen above are (L-R): Nicolas Pechnyk, VP– Engineering, Faurecia Interior Systems; Christophe Schmitt, EVP –Faurecia Interior Systems; Franck Euvrard, MD – Faurecia Interior Systems India; the consul general of France in Mumbai, Jean-Raphaël Peytregnet, and special guest Lila Poonawalla of the Lila Poonawalla Foundation light the lamp to mark the formal inauguration of the Rs 110 crore R&D centre.
To focus on the Group’s expertise in vehicle interior systems, automotive seating and exteriors, the R&D centre has set a target of employing 800 engineers by 2015 and 1,000 by 2020 from the current 600. The company plans to integrate 100 engineers yearly with the average age of engineers hovering around 27 years.
More specifically, interior systems will now have a full range of R&D for developing products both for the domestic market and for supporting international programmes.
Parts developed over the three business groups at the tech centre will include instrument and door panels, centre consoles, gloveboxes and related mechanisms, seat frames and complete seats as well as full front-end modules.
For Faurecia, which is the sixth largest automotive equipment supplier worldwide, the tech centre reinforces its Indian footprint and its keenness to offer complete engineering capabilities to OEMs in the automotive hubs of the world.
Its Pune centre will focus on industrial design, CAE/CAD and product and process validation. Engineering teams will hereafter work on automotive projects right from the inception stage ranging from sketching to concept styling to the final pre-serial production and validation process enabling smooth commencement of production worldwide.
Christophe Schmitt, executive vice-president of Faurecia Interior Systems, says that OEMs have a global product plan with more and more sourcing done internationally. “So unless you have a global engineering centre and manufacturing set-up, you cannot be part of these programmes.”
Spread over 10,000 square metres with 4,500 square metres earmarked for offices and 5,500 square metres for product and process validation, the Pune R&D centre has attracted an investment of around Rs 110 crore and has at its disposal an additional 10,000 square metres space for further expansion.
Going forward, Faurecia is looking at a deeper engagement with automakers in India as they move towards more aesthetically appealing vehicles, particularly vehicle interiors, for local customers. This would necessitate a closer interaction between the two to meet cost and quality targets. The tech centre will step in here.
Faurecia has a second R&D centre located at Bangalore which is dedicated to emissions control technologies. At present, 60 percent of the supplier’s revenues come from Europe but by 2015 it is targeting 50 percent of its global revenues to accrue from outside Europe and here Asia will play a key role. The 16.2 billion euro company is optimistic of multiplying sales in Asia to 4 billion euros by 2015 from 1.8 billion euro in 2011 to showcase the importance of this market.
In Asia, the fastest growing sites for Faurecia are perceived to be China, South Korea, Japan, India and Thailand. As a priority region for Faurecia’s expansion, Asia accounted for nearly 11 percent of the Group’s total sales in 2011, up 16 percent from the previous year. The Asian share of total sales is projected to jump to 17 percent by 2015.
Among its key customers worldwide, German automakers represent 38.6 percent of the company’s revenues with the VW Group constituting 25.3 percent of it followed by PSA Peugeot Citroen at 16.6 percent and Renault Nissan at 11.5 percent.
In the auto clusters
In India, Faurecia plans to follow the OEMs in the three main auto clusters – Pune, Chennai and Delhi. Though in Asia, the chunk of the revenues is expected to flow from China, India with a passenger vehicle market of two million that is projected to expand to five million by 2015 and 10 million by 2020 offers great growth potential for the supplier.
Its major clients in India include Mahindra & Mahindra on the mechanism side, and in interiors the tech centre is working on programmes for Ford and Nissan in the Chennai cluster as well as collaborating with Ford in Gujarat. Besides, it is working on new projects with VW for both seating and interior systems. A key customer in seating is Maruti Suzuki besides Skoda and VW for seat mechanisms and seat frames. Product development is also underway for other carmakers like Hyundai.
India has become significant for Faurecia with its Eiffel Tower market according to Schmitt, with price-points of products at the low end as a result of which sales are not too high currently. But all this is set to change as the market expands sizeably in the A and B segments, going forward.
Further, while Faurecia has a presence in R&D in all its business groups in India, its present manufacturing capability is limited to emissions control, seating and interior systems.
But Schmitt clarifies that creating a manufacturing presence in automotive exteriors in the country is also on the cards in the future. While globally, automotive exteriors are leading the race at number two position, in Europe Faurecia is the market leader with a 28 percent share in bumpers. The company is now accelerating its programmes in automotive exteriors outside Europe, especially in Brazil and China, but cites cost of high-quality painting as a deterrent to expanding its reach in automotive exteriors outside Europe, especially in India.
In emission control technologies, following its acquisition of Emcon Technologies in 2010, Faurecia has become numerouno globally and has five emission control plants in India to supply exhaust systems to auto majors like Ford, Hyundai, Nissan, Tata Motors and Toyota. Its strategic partnership for pollution control systems with Cummins Emissions Solutions that leads in diesel engines for commercial vehicles has further given it a leg up.
The company that started operations in India in 1995 has nine manufacturing sites in the country with 1,600 employees. It plans to further ramp up manpower strength to 3,300 by 2015.Reinforcement of the skills of the engineers will form an important highlight in future, according to Franck Euvrard, managing director of Faurecia Interior Systems. In India, the component maker is involved in skills and people development in the country with the Pune tech centre enrolling batches of 20-30 graduate engineers every three months with 97 percent of them holding a Bachelor or Master’s Degree.
R&D forms a key growth driver for the Group globally and in 2011, it invested around five percent of its revenues in R&D with Euro 100 million spent on innovation. The Group also files 300 patents yearly of which 120 are in interior systems alone. Every year, the R&D teams at the Indian tech centres mastermind over 200 innovation-led projects.
Going forward, Faurecia will be looking at development of specific research projects for the Indian market and integration of new technologies in its pilot plants. Some of these could include materials research, where the Faurecia tech centre at Pune is keen to develop bio-metals as an alternative solution and is also working on safety features such as side crash and air bags. Green and light solutions will play a significant role in designs besides comfort and safety, particularly in seating. As lightweight vehicles tend to become still lighter, the move towards composites after the transition from steel to plastics will be a keen innovation direction for the company.