Halla Visteon’s cool strategy for the Indian market

Halla Visteon Climate Control Corp (HVCC), the second-largest automotive climate systems supplier worldwide with a full line climate system is pushing the envelope on car climate technologies with its products for best-in-vehicle comfort and ambience. Despite a slowing auto sector, its India arm, Halla Visteon Climate Control Corp India (HVCC India), has recorded reasonable growth and added new products as well as customers even as it has increased business from existing customers.

HVCC India’s clientele include the Renault Duster, Mahindra XUV500 and more recent cars like the Ford EcoSport and Hyundai Grand and Xcent. Other customers include Maruti Suzuki, General Motors India, Renault-Nissan and Ashok Leyland Nissan. The products it offers have been driven from global R&D efforts combined with local inputs aimed at meeting domestic market requirements.

The company’s South Asia operations that cater to several markets have their main hubs in India and Thailand. While Thailand has one plant at Rayong near Bangkok, the Indian operations have three in Pune, Chennai and Bhiwadi in NCR. In Thailand, besides passenger cars, its products cater to pick-ups, one staple segment in that market.

CORE CHALLENGES
At present, automotive climate control technology suppliers face three core challenges: environmental pressures, changing market needs and rising consumer expectations. As a result suppliers have to be able to offer technology that meets changing customer choices. One pillar on which HVCC is pushing its climate control system is its eco-friendly features.

Speaking to Autocar Professional, Murali Vaidyanathan, managing director of HVCC, South Asia said, “Our entire global R&D drives on three pillars — passenger comfort, eco-friendliness and fuel efficiency — identifying and understanding specific market needs and offering products based on these pillars.”

MADE FOR INDIA
As a result of India’s weather conditions, and being a small car market, designing a climate control system offers unique challenges. Hence with its new technologies, HVCC is manufacturing slim and  compact heat exchangers and HVAC systems that are lighter, affordable and help create more space within the car.

Dong Woo Hwang, director-product development, Asia Pacific, and the man behind the new technologies, said: “Unlike Korea, the Indian market is cost sensitive, demands fuel saving and higher performance and so to address these issues, our technology has a weight reduction of 15-20 percent.”

As a example, Hwang offers the example of the Hyundai Grand i10 hatchback.

“Addressing key areas like eco-friendliness as well as cost is challenging. In the Grand i10, we introduced a slim HVAC, radiator of 10.8mm against the 11.5mm of the competition, internal heat exchanges lines with innovative, patented metal seal fitting (MSF) , a rotary suction compressor that delivers improved fuel economy by creating less suction loss compared to a traditional suction valve, and a cluster ionizer, thus making it lighter and offering better ambience with clear air,” says Hwang.

The primary goal of an automotive climate control system is to provide passenger comfort as quick as possible. As heat flows in one direction only, from areas of high temperature to low temperature, the climate system must create a flow by cooling the air below the ambient air temperature. This is done with a vapour compression system.

HVCC works closely with OEMs from the very start of the product development cycle, and this was particularly so with the Ford EcoSport, launched in India and several other markets including Brazil, China, Russia and ASEAN market. “We have to make sure the local business requirements and also global efficiencies are harnessed,” says Vaidyanathan.  

HVCC’s revenues primarily come from HVAC systems, powertrain cooling, electric vehicle and hybrid battery cooling and compressors.  Over the past couple of years, the company has performed better against the backdrop of a slowdown and expects 2014 to be a year of moderate growth. Real growth is expected to commence in 2015-16 as the company hopes that its ongoing talks with a few customers will materialise as orders. Given that vehicle sales are rising, its expectations are justified.

INTERVIEW: M Vaidyanathan, MD -South Asia, HAlla Visteon

What was your company’s growth last year and your expectations in this fiscal?
Over the past three years the market has seen stunned growth as compared to double- digit growth in the decade before that.

This has hit confidence levels in the industry including that of consumers and investors. However, we hope to see significant numbers in 2015 as we are in talks with customers for orders that should materialise towards the third and fourth quarters of this calendar.

We have a fairly good and regular order book that has been growing over last two years. However, it doesn’t reflect to that degree when we see it in dollar terms thanks to the erosion of the rupee.

Where do you see growth coming from?
At Halla, we work on a five- year business plan, and going forward, we hope to outgrow the industry. Our plan is to enhance market share. We have roped in new customers; existing customers are getting into new regions.

Moreover, we have got new products which are related to fuel efficiency like EGR cooler and charger cooler. Specifically within the region, the Thailand facility is integrated with our region for products like the water cooler charger. All this would result in our significant growth.

What new technologies do you foresee in vehicle climate systems?
We will see an increase in the use of fully automatic systems. Air quality is something we definitely see as a trend and we have products  like fragrance and ionizer systems being used more and more. As far as the OEMs are concerned, they want more efficient systems and value-for-money offerings.

What investments has HVCC lined up for India?
I cannot give you specific numbers. We are adding capabilities in Thailand and there will be capacity expansion in India. We keep increasing our product offerings continuously and are collaborating with OEMs. Our products for both diesel and gasoline systems mean that changes in trends do not impact us.