Delphi bets big on connector business

Delphi Connection Systems India is to diversify into terminals and data connectivity, which are among the fastest growing segments globally, to further strengthen its connection systems product stable. Shobha Mathur visits the Kochi plant which will drive the new programme.

A connector can save your life! That, in a nutshell, brings into perspective the significance of the connector systems manufactured by Delphi Connection Systems (DCS) at its Kochi facility at Kerala.

Revolving around Delphi’s global mantras of safe, green and connected, the company has embarked on an expansion exercise in India in terms of both products and footprint. For a start, DCS India will diversify into the new businesses of terminals and data connectivity in 2014 to further strengthen its connections systems product portfolio.

In October 2012, Delphi Automotive PLC acquired FCI Group’s Motorized Vehicles Division (MVL), a leading global manufacturer of automotive connection systems, which develops high-value, technology applications. The acquisition has enhanced Delphi's combined product portfolio and capability in connection systems.

“We have strengthened our market leadership in the global automotive connector industry and positioned Delphi to further benefit from the growing electronics and safety content in motor vehicles,” said Rodney O’Neal, CEO and president of Delphi at the time of the acquisition. “The combined connector businesses will deliver significant revenue and operating synergies and accelerate our sales and earnings growth.”

Terming it a win-win acquisition, Bruce Shuler, general manager – Delphi Connection Systems India, who took over at the helm of affairs at Kochi last July, told media persons on a visit to the facility end-November that he had never seen a better executed and better acquisition as it has rendered the company stronger.

Years ago FCI, France was keen to establish a footprint in India for which it entered into a JV with OEN Connectors, subsequently buying out all the shares from the JV partner. Since FCI’s manufacturing set-up was based at Kochi where it had developed its capabilities in production processes, tool design and other expertise,

DCS India, now armed with the MVL buy, will continue to function from the same location while branching out further. The acquisition has also brought on board the global toolroom at Kochi, the engineering centre at Chennai besides the manufacturing facility.

The Kochi plant currently produces six product lines including housings, safety restraint systems (in which Delphi is the market leader with a one-third share of the global market), mechatronics packaging and pin headers, electrical centres and high power with two new products – terminals and data connectivity – taking up the number to eight by end-2014.

GLO-CAL IMPACT

“To serve customers, there is a need for globalised housings and localised terminals. Localised housings within imported terminals do not give the required price points, so one of the areas we have identified is terminals. We conducted a study and determined a start-up special technology of a high-speed stamping press, striking 1,200 times in a minute. We have identified six terminal families that we plan to produce here starting 2014 and after that we can expand YoY. We will start with one stamping press with around six dies and build the capability at the same time, getting all data connectivity requests from OEMs for direct connectivity products. It is the fastest growing product line globally and we are working with OEMs to produce localised data connectivity products at Kochi. They want different levels in terms of basic plug in smartphone, charger phone and USP connectors among others. Feature functions will go up within vehicles as people want to be connected and have a full range of products,” says Shuler.

The designs of the standard data connectivity connectors used globally will be leveraged for localised production in India. Investments are being made in the stamping press and dies, though officials are not ready to disclose the amount involved. Terminals and data connectivity are the fastest growing segments globally as customers increasingly look for vehicle connectivity in infotainment, mechatronics packaging and electrification and all mega trends and product developments of Delphi are based on it.

The 10,000 square metre manufacturing facility at Kochi has around 32 moulding machines and 26 workstations, automated, semi-automated and manual.

Starting with the design work, DCS is undertaking development, test and validation and production, at Kochi with the local toolroom meeting 85-90 percent of Delphi’s global requirements and being well connected with other toolrooms. Mika Arpe, Global Product Line Director – Safety Restraint Systems, says Delphi's test and validation centres around the world maintain the same equipment.

The global tooling centre in Kochi is spread across 2,200 square metres and produces 110 sets of tools for Europe, Asia, South and North American requirements of Delphi as well as for domestic production. The Chennai engineering centre has 69 engineers and undertakes product design for Europe and Asia and a small amount for North America.

According to Shuler, the Kochi plant has been benchmarked globally for zero accidents since it started and has been recognised for performance and safety by the Natural Safety Council.

CONNECT-ING SAFETY MEASURES

Connectors envelop a gamut of products. For instance, safety restraint system connectors in a high-end vehicle significantly reduce fatal injuries by 25 percent in case of frontal airbags and 45 percent in belt pretensioners with upto 800 connection points in a vehicle. New applications have now emerged of SRS (Safety Restraint System) component connectors in knee airbags, pedestrian protection and at an average at least 10 squib connectors can be found in a vehicle.These connectors, which are used to connect wiring to pyrotechnic devices such as airbags, belt pretensioners, knee bolsters and pedestrian safety devices, help protect passengers in a vehicle.

When it comes to connecting wiring systems to airbags and seatbelts, the squib connectors have to perform in severe automotive environments. They require circuit filtering capabilities and the ability to cooperate with on-board diagnostics. Squib connectors are available as a pigtail assembly, or a cable sub-assembly (squib + wire) where the customer will specify the connector type, the wire length and type, or as a jumper harness assembly featuring the squib connector at one end, a sectioning connector at the other and attachment accessories in between.

Another critical part of SRS connectors are retainers that are installed into the pocket of the ignitor. They contain the features necessary for a reliable connection to the squib connector including indexing, a shorting clip and pin protection. These design features encompass the interface.

Globally Delphi is supporting a WHO road safety campaign with a 10-year action plan to reduce global fatalities, says Arpe, adding that 90 percent of the fatalities occur on roads in developing countries with traffic being the major contributor. Globally, the market for airbags and other safety restraint systems is distinct. Back in the 1970s, North America was the first to see the introduction of the airbag in a mass production car. However, it was not until the 1980s that their use became widespread.

Western Europe, in contrast, was relatively slow to adopt the airbag but from 1990s onwards, their use in Europe has grown rapidly. In particular, the increased focus on the safety of in-vehicle occupants has seen a proliferation in the number of airbags fitted, even in low-cost, entry level models. Typically these now include multiple passenger, side, curtain and knee bags, to the point that their use is now more prevalent than in North America. For example, up to 30 airbags can be found in luxury car models in Western Europe.

However, in the fast-developing economies of Brazil, India and China, relatively fewer cars are equipped with safety features. Airbags tend to be limited to basic driver and front passenger applications. Similarly, seatbelts feature more mechanical rather than pyrotechnical restraining systems. Despite the weaker public interest for these technology advancements, emerging markets, however, account for a large part of the global market share and are expected to witness impressive growth going forward.



GROWING DEMAND IN BRIC COUNTRIES

Among the countries where safety legislations have been introduced is Brazil where the government mandated airbags in every vehicle by 2012, forcing frontal airbag penetration up from less than 10 percent to 100 percent in just four years.

The Chinese market is also growing rapidly because people are buying more cars. A version of the European NCAP (New Car Assessment Programme) test is helping airbags increase penetration. While earlier generations of car buyers focused mainly on exterior styling, present-day buyers are paying more attention to safety features and the overall driving experience. Rising customer concerns over vehicle safety is also now one of the factors contributing to this growth. Chinese vehicle manufacturers tend to adopt more advanced safety systems in a wider range of passenger vehicle segments to differentiate their products in this highly competitive market.

Overall, the SRS market is pegged at $ 660 million with North America and Europe accounting for 60 percent of it.

In India too, with airbags getting increasingly deployed across a gamut of vehicles, the opportunities for safety restraint systems has been on the ascent. Here, airbag deployment is gradually moving from high-end and D- and E-segment cars to smaller cars as OEMs become more aware of people’s needs.

Currently, high-end Mercedes-Benz S-class and Jaguar saloons use about 30 airbags and 800 connection points that have to work flawlessly to ensure perfect results. Moreover, airbags have to remain stable during the lifetime of the vehicle and therefore resistance stability becomes very important to ensure their longevity.

It is here that connectors fulfil multiple requirements of mechanical performance, robust usage, mechanical properties in design and reliable electrical characteristics. “If the airbag system does not work in a crash, it becomes a serious problem for the carmaker. The latest innovation, therefore, is integrated grounding to tackle electrostatic discharge. During the assembly process, if there is static electricity on the worker’s body and he/she touches the module, it will transmit that energy and spoil the airbag. Hence, integrated grounding has been developed to take away electric charges from the module. Later electric charges will not be able to destroy the module during the life of the vehicle so the innovation acts as a protection technology,” says Arpe.

OEMs are believed to be working on airbags in all their future models of 2016 in anticipation of a legislation on it coming into force and SRS products will play an important role here. The requirements of SRS system components for hybrids and electrics is expected to be similar as they have similar electromagnetic fields.

“That means that our products have opportunity with existing regulations but if regulations become more stringent and as and when there are more highways and speed limits, there will be much better products like airbags fitted in every vehicle in India. Road networks are going to expand and quality of roads will determine these products. About 7-10 years ago, equipment in Indian cars was limited but that has changed and will change faster now. Regulations will only support but change will come from consumer needs. And the consumer is getting more updated about products, issues on highways and requirements,” remarks Reji Varghese, president and MD of Delphi India.

ERGONOMIC DESIGN AND LOWER COSTS

The trend globally is moving towards new global standards requiring removal of old type of interfaces and technical problems like damaged pins and what is non-ergonomic. According to Arpe, companies are preparing the next generation of products that will improve the mechanical properties and simplify the architecture to take out some cost. DCS is working with some OEMs to improve mechanical performance and use lower amount of precious materials to lower costs in the connectors.

A major benefit of an ergonomic product is it improves the quality in the factory, which in turn means quality costs and internal costs go down leading to zero defects. A spin-off for the OEM is more reliable connection systems that will lead to less vehicle defects and fewer customers returning to dealerships complaining about problems, making the overall vehicle system more robust.

“We will still use precious material but the trick is to adjust the design according to the latest level of requirement and there is a focus on use of less precious material. Precious material will also be made at Kochi if the OEM specifies but at present we are still adjusting the latest generation that is still emerging and will grow over the next 5 years and preparing for the next generation that will arrive in India by 2017-18,” he continues.

The SRS module made at Kochi will be used in passenger vehicles and small buses in India as heavy duty trucks don’t use airbags. It is also necessary that the driver and occupants wear seatbelts, because without seatbelts an airbag can be harmful. If the occupant is out of position and the airbag hits him, it is like a big load of energy hitting him in the flash of a second. “Trucks don’t have a regulation in Germany to mandate that the driver wears a seatbelt and in India it is similar so if you put an airbag, you first need to change the regulation for seatbelts,” says Arpe.

For the bus and truck segment, DCS India has a more long-term vision of over 20 years with the vehicle’s robustness more important than the cost of the product.

“You have to deliver a component that can withstand the extended lifetime of the vehicle compared to a passenger vehicle, so cost is not the major driver. We would qualify the same product for both segments as from the environment point of view, it is more or less the same,” he remarks.

DCS India's SRS business currently sees 75 percent of the connectors produced being exported with the balance 25 percent supplied to the domestic market. At present, the India business contributes just a small share of the global business. Till now, the aim was to transfer the global business to India to tap its status of a low-cost base and not growing locally, but Shuler says his challenge now is to reverse this equation. “We can provide value to global business, but our number one focus is to grow domestically.”

The DCS India target is to reverse exports to 25 percent of the total so that more products are localised rather than being sourced from other regions. With this, DCS India's future growth trajectory seems bright. Importantly, it will also be contributing to helping create safer vehicles and saving lives.