‘The Chennai Tech Centre has become one of Delphi’s key global hubs for product development.’

Chris Reider, vice-president, Global Engineering Packard Electrical/Electronic Architecture, Delphi, on the company's operations, growth dynamics and the business opportunity that is India. An interview by Kiran Bajad. 

Delphi has recently expanded its Chennai Technical Centre for the connections systems business. Can you detail the benefits for Delphi in India?
Our Chennai Technical Centre has been operational since the past 15 years and has continued to develop its capabilities. The Chennai facility has become one of our key hubs for global product development and manufacturing to support our connection systems business worldwide.
With this expansion, we have finalised our full service capability for automotive connection systems. We have also brought in a full service validation and testing facility and are able to develop products, simulate, analyse, design and develop the tooling for products, prototypes, test and launch them.

These products could be introduced anywhere in the world. This is a technical centre we rely on globally and, importantly, it is setting us up for future growth with local OEMs. With this capability, we can localise our development as well as manufacturing of products.

How big is the connection systems business for Delphi globally and how much growth do you foresee in India?
The connection systems business is a global business and accounts for about $2.7 billion of our $8.3 billion business globally. While Indian volumes are not at the level compared to other Asian markets like China, last year we grew higher than the market. This year too, we are expecting better-than-market growth.

We develop design to print in each country where we service customers and from that point of view the Chennai centre is very important. We leverage the capabilities here in India to carry out product development and are able to supplement what we do in other regions.

Which are the areas where there are growth opportunities in India for the connection systems business?
We see opportunity in all our electrical architecture business. We have a broad portfolio of products, particularly in connection systems, housing and terminals. With the additional safety feature we are getting to develop for Indian cars, our business with the Safety Restraint System or airbag connectors is growing significantly.

We also anticipate (new business in) high-speed cable assemblies, communication and infotainment systems which will be localising here in India. We will be localising our capabilities here for higher power wiring harness architecture, hybrid and electric vehicles.

What are the key technologies globally in connection systems?
The Indian market is likely to face the same challenges that the rest of the world is facing, like more safety features in vehicles, vehicle design for lower emissions, mass reduction of weight for better fuel economy, and lesser use of fossil fuel.

In the connection and wiring harness business, our development is focused on supporting safety features in vehicles including the airbag system. Everything we develop is for optimised mass and size; connection systems are getting smaller, higher density connections but at the same time they need to perform higher in terms of temperature and applications capability while managing costs.

The development and R&D associated with connection systems is driving towards higher and better performance solutions and addressing key challenges in the industry like the use of aluminium cables in automotive to replace carbon, and this comes with significant mass reduction.

The Indian auto industry is moving towards safer vehicles with a focus on safety features like airbags, ABS and electronic stability control. How big is this opportunity for Delphi?
I think the increased focus on safety in the Indian market will bring more electronics into vehicles, with growth in electronics and the need for complex vehicle architecture. It will drive more cable and connection systems and as safety features increase, the complexity of these individual parts also increases.

We have to deal with this complexity with cost, mass and vehicle packaging. As an electrical architecture company, we work with the OEMs way ahead of the design architecture. So we have an opportunity to work with customers and we will look at the entire vehicle electric system.

What are the localisation levels for connection systems in India?
We have got full service and design capabilities in India in a large part of our portfolio. I see localisation levels increasing further because to grow in our industry, you have to provide local support to customers. You can do that if you have got the capabilities here, and to support the customers we have to competitive. Doing local design and manufacturing in tooling is exactly how we maintain our competitive position in the market.

How much does India contribute to Delphi's global operations?
India is a long-term strategic market for us in engineering. It is a unique place where we have an opportunity to grow revenues with the local market but also leverage the capabilities that we have in India in terms of universities aligning with our business.

We are continuing to invest in our people, infrastructure, manufacturing processes and particularly in our core competencies in India. We are leveraging Indian capabilities and it will pay dividends for us in terms of our global growth.

How you perceive India compared to other Asian markets?
India is a little behind countries like China, which is moving faster in its evolution in terms of high-end premium vehicles. The market continues to shift towards more complex vehicles there. India is evolving in that direction but not as fast.

The manner in which we began expanding our engineering footprint in China, we are doing similarly in India. I am happy with the capabilities that we have built but there is still a long way to go and we are already expanding with the market in India.

I am optimistic about the growth of the Indian market. There will be a number of external factors which influence the rate of growth in India. Government regulations and infrastructure in the economy will decide how fast the automotive market will grow.

India is unique because of its tremendous growth potential. Today many people use two-wheelers for transportation and as the economy and income grow, more and more two-wheeler owners will upgrade to four-wheelers. This will drive the market opportunity for Delphi. I am excited about the future in India – it will bring tremendous challenges but great opportunities too.