Capitalising on new business opportunities

German auto component major MAHLE has had its best year ever in India in 2022, with total revenues exceeding Euro 400 million, up from roughly Euro 270 million in 2021. The nearly 48 percent increase in business is attributed to a strong domestic demand despite a number of obstacles such as supply-side difficulties, inflation, routine bottlenecks, and others. MAHLE notes that India remained largely insulated from the challenges arising out of the geopolitical trends that have impacted many countries.

Major global automotive markets in Europe, the US and China have actually contracted on account of headwinds arising out of problems such as the pandemic related lockdowns, the Russian-Ukraine war and semiconductor shortages.

In fact, India's demand bounced back to the point that it overtook Japan, as the world's third largest light vehicle market in 2022, led by a strong increase in demand for personal mobility and last-mile deliveries, post pandemic. In this scenario, MAHLE Aftermarket India achieved a 12-14 percent growth. On a general note, the company aims to achieve growth double than the industry numbers.

How was FY22 for MAHLE Aftermarket?
We had a good recovery after the Covid-19 situation. MAHLE Aftermarket India grew stronger than the industry as a whole. We successfully entered the electric vehicles (EV) parts eco-space through the introduction of motors and controllers for the three-wheeler segment.

Where do you see the challenges coming out from the internal combustion engine (ICE) and EV ecosystem and how do you plan to mitigate them?
One challenge which is definitely there is in terms of establishing the correct migration pace. It will be a wait and watch approach to understand what parts applications come under repair and service. Another challenge would be to establish a platform that would undertake skills transfer (from ICE to EV) at a local garage level. Parts manufacturers will also have to invest extensive time and effort towards development of primary distribution networks.

What is MAHLE's current market share in the ICE and EV component aftermarket segment-wise?
Core to the engine product portfolio MAHLE Aftermarket in India for many decades now has been the frontrunner towards identifying a respectable market share. However, EV domain still witnessing very limited ViO presence, there remain plans to develop and grow this business in line with the market growth.

What is the total amount MAHLE Aftermarket has invested in India till now?
MAHLE spends extensively on its technology roadmap along with the manufacturing footprint at the global level. Specific to MAHLE Aftermarket India, we have had investments done in the digital space (customer interface, loyalty programmes at secondary level, digital enablement). Very soon we plan to introduce RemotePRO, opening up maximum diagnostic possibilities for independent workshops. RemotePRO is the perfect addition to the MAHLE TechPRO universal diagnostics tool — giving independent workshops the ability to use the same range of functions as branded workshops, even on vehicles that are very rare or difficult to diagnose.

The German aftermarket company is moving into high technology areas like ADAS.

Can you share your roadmap to tap into the domestic market for battery diagnostics?
A battery diagnostic check is necessary both for maintaining and repairing electric vehicles and for determining their residual value. Last year, MAHLE Aftermarket became the world’s first supplier to provide independent workshops with the means to run battery diagnostics and service on electric vehicles. We have equipped our TechPRO® diagnostic tool with new software for this purpose. As part of the further expansion of the diagnostic function, MAHLE Aftermarket plans to develop suitable licensing models for its customers. By taking this step, MAHLE is opening up new, future-proof lines of business for independent workshops beyond the combustion engine. With the first set of pilot projects in Europe, we plan to bring the technology to India soon.

Do you see digital twinning gaining more credence in terms of testing and technology perspective?
Digital twinning will get more momentum as it helps create an environment / system that looks like and behaves identical to its real-world counterpart. MAHLE has made intensive progress in the field of vehicle diagnostics enabling independent workshops to perform complex diagnostics and service routines with access to the original equipment manufacturer’s data — just like authorised workshops. Related to the subject, MAHLE RemotePRO as explained earlier, will be the key to support digital twinning in testing and technology. EV coolants have become very important for performing maintenance on cooling circuits on EV batteries.

Do you have a plan in the aftermarket business to introduce specific coolants and lubes or other EV-related products?
Currently, we do not have any specific coolants for Li-ion batteries in our portfolio. However, we do not rule this out in the future. On the hardware side, we already offer radiators, chillers and e-compressors for e-vehicles, just to give an example.

The role of driver-assisted systems like ADAS is gaining more traction with OEMs. Are you participating in this category as you have a Digital ADAS 2.0? Your Comments?
Digital ADAS 2.0 — a reliable calibration of driving assistance systems is our flagship product that has entered the US /Europe aftermarket space. Indian
virtual input/output system is still at a miniscule level percentage in cars with the ADAS feature. However, launches done by a few of the OEMs in the past two to three years definitely gave a positive indication of this feature gaining prominence. Initiatives taken by the government in the field of vehicle safety add to the product /technology significance. We plan to introduce this product through MAHLE Service Solutions in the year 2023.

Digitisation is playing a key role in India's automotive space. How is MAHLE embracing digitisation from the customer engagement and the manufacturing systems standpoint?
MAHLE already took an important next step toward strengthening its logistics structures and supply chains by setting up fully automatic logistics hubs. MAHLE opened a fully automatic warehouse in Olive Branch/USA. In 2023, European locations will follow. MAHLE Aftermarket plans to gradually build up a network of fully automatic hubs to guarantee fast and reliable handling of goods. This is intended to benefit customers by ensuring faster deliveries, fewer returns, and minimal cost shares for goods logistics.

A new trend of Tier 1 suppliers in aftermarket space is retail. Do you plan to take this route too?
So far, there remains no plan to make any changes in the existing distribution channels. However, MAHLE Aftermarket will be active towards exploring the service domain in order to offer the end customer a complete package of parts, maintenance and service.

This interview was first published in Autocar Professional's April 1, 2023 issue.