India’s software industry, which is of a global calibre and scale, has given a big fillip to brand India. The country’s engineering & R&D (ER&D) industry strives to do something similar. As the role of software gets increasingly crucial across multiple sectors, with automotive being a major driver, the prospects of the Indian ER&D seem brighter than ever before.
“Fundamentally, the business is changing and the software is enabling and powering businesses. I'm not saying this in an arrogant manner, but there is an increased belief that if there is one country that can solve the embedded interface, hardware, software, SIL (safety integrity level), SOC (system on a chip), all put together then it’s going to be this country (India)”, says KS Viswanathan, Vice-President, Industry Initiatives, NASSCOM, during a recently held annual Autocar Professional-NASSCOM roundtable discussion.
There seems to be recognition of the opportunity at the government level too. Karnataka became the first state to launch an ER&D Policy in March. According to the Policy, India’s share in the global ER&D industry is pegged to grow at a CAGR of 12-13 percent to reach $63 billion by 2025. In 2019, India’s share in the global ER&D spend of $100 billion was $31 billion.
From the automotive sector, megatrends like connected vehicles, electrification, autonomous driving are responsible for driving up activities in the ER&D industry. IT major TCS, which has a long association with the automotive sector, witnessed “significant growth” in the embedded electronics segment for 2-3 years before Covid struck. The growth momentum is back after a couple of quarters’ blip and along with it a new crop of automotive clients for the company.
“So right now if you look, there are many accounts where there are significant ramp ups and new projects are happening in this area. Not only this, we have started working with new-age companies that are coming up with new solutions,” says Regu Ayyaswamy, Senior Vice- President & Global Head, Internet of Things, Tata Consultancy Services. One of the overseas clients could be making an entry into the emerging EV industry space in India.
Betting big on ER&D
India is home to a cluster of global technical centres, both of OEMs and Tier 1s. For example, Daimler’s largest R&D centre outside of its home country Germany, is located in Bangalore. Renault-Nissan’s global technical centre in Chennai is another example of India’s growing status in the global ER&D space. With around 9,000 engineers, Renault Nissan Technology and Business Centre India (RNTBCI), near Chennai, is set to play a more crucial role in the business plans of both Nissan and Renault. The Japanese OEM, under the Nissan Next plan, and Renault, under its Renaulution strategy, are betting on major turnaround in their fortunes. “We are part of the journey where our engineers are joining the next set of technologies that should be built on the cars globally,” says Krishnan Sundararajan, Managing Director, RNTBCI.
Nissan’s Magnite and the Renault Kiger, both very crucial for their makers’ business sustainability in India, have seen significant contribution from RNTBCI. Both the models were ready for launch during the ongoing pandemic, thanks to the digitalisation. “Both of the cars have been launched with high level of digitalisation footprint wherein we had to keep most of the expertise and supplier at their own countries and we had to run out this car from Chennai plant successfully,” says Sundararajan.
He adds that numerical simulations in terms of crash, NVH and performance have been a strength of RNTBCI engineers. However, a greater degree of advanced simulation processes to replace certain physical steps during the pandemic period. Usually, after the crash test simulations, a physical prototype is still crash tested before applying for homologation. “But this time we had taken a large amount of accuracy in the calculation. We started respecting all the calculation and said that let’s trust the calculation and moved the car directly into the homologation. We have seen wonderful results in terms of the digital twin that has been produced from our Chennai plant,” shares Sundararajan. The successful launches of the Kiger and Magnite, which are delivering the goods for their makers, also stands testimony of the growing Indian ER&D capabilities.
As the automotive industry evolves, some passenger vehicle OEMs are repositioning themselves as mobility solution providers, while some Tier 1 suppliers are becoming technology suppliers. Global major Bosch, which has a huge engineering team of over 20,000 engineers in India, is focusing more on developing systems that offer integrated solutions across domains. “We are not just delivering single components whether it's only to a powertrain or a safety domain or driver assistance, but solutioning which cuts across these domains,” says RK Shenoy, Senior VP — Mobility Engineering, Robert Bosch Engineering & Business Solutions. The organisation is witnessing a growth of 10 percent or so in terms of manpower, despite Covid, as the software requirement for new solutions is rising. “The amount of software that has to be developed for these systems is far more than what we used to see before, and the limiting factor is our ability to actually bring the required competencies,” says Shenoy.
With disruptions galore, the auto industry is also becoming more collaborative in nature. Collaboration is no longer a choice, especially when it comes to tapping the megatrends of EVs, connected vehicles, and autonomous driving. And that’s leading to organisations like L&T Technology to develop new solutions. The company looks at the key megatrends in a holistic manner. “The influence of this mega trend is not only on the software part. It is also on embedded technologies, on the powertrain, light weighting of the material, thermal management, analytics, connectivity, everything encompasses into that. We have taken this step and are investing in what is required and we closely monitor these,” says Shailendra Shrivastava, Global Head, Transportation, L&T Technology Services. In order to showcase its capabilities, L&T Technology Services has converted an ICE vehicle into an EV, with added features connected and autonomous tech. “We intend to showcase to our customers our capabilities on the full life cycle of electrification, including design of e-motors, the transmission, the converters, invertors, battery pack, BMS, chargers, on board chargers. We have done the whole thing to show it to customers. What good has happened is we have generated new frameworks, new tech, some patents have been filed based on that,” says Shrivastava.
It’s quite clear that India has a good opportunity to be a globally leading ER&D hub. Though certain things need to be done to capitalise the full potential. For example, meeting skill gaps is crucial. “On one side, we need high domain knowledge for developing these systems and understand the embedded space. On the other side, with digital technologies coming up, applying the AI, ML in all these products is needed,” says Shenoy. Industry players, including Bosch, are partnering with academia to address these challenges.
Also, more ER&D organisations need to be attracted to India as 28 percent of the top 200 R&D companies, and 40 percent of top 2,000 spenders on ER&D do not have a presence in India yet. “Our objective is to showcase them the capability of what we are creating, ease of doing business, which will help grow this industry,” concludes Viswanathan.
The feature was first published in Autocar Professional's August 15, 2021 issue.