Dave Shemmans, Chief Executive, Ricardo

Ricardo is UK’s leading independent automotive consultancy firm. What does this consultancy involve?
We cover the whole value chain from the top end management down to the shop floor. That would involve helping customers with product and technology strategy, and re-engineering processes for product development. We do everything from designing components, systems or whole vehicles. We design engines, transmissions, vehicle systems and put the whole package together. We work with every major automotive OEM around the globe.

At what stage does a vehicle manufacturer rope in your company?
There are three ways. Maybe a customer has a problem with an existing product, maybe the engine is too noisy, maybe it has too much vibration, so they come to us and ask us to fix the problem. The second part might be that they want to develop a completely new engine. For example, we have developed engines for General Motors and Ford, and even whole vehicles for Renault. Typically the development cycle for a new engine takes 36 months from scratch to production. If it is fixing a problem, it could take a very short time, perhaps a few weeks only. Our projects go from one month to five years. The third way is that we research our clients and spot areas where we think we can help. So sometimes they come to us, and sometimes we go to them.

Do you have your own plants to test or make the prototypes?
Our work starts off in our engineers’ heads. Then it goes on to computers where we do design and simulations. We then build prototypes; that means we get into mechanical hardware. We test the prototype on our test beds. We have a large infrastructure for testing engines, vehicles, and transmission. We have test beds in the UK, USA and Germany but not yet in India. Once we satisfied that the prototype works on our test bed, we put it in a vehicle which is then tested. Finally that would go into production at our clients’.

Have you secured any work in this part of the world?
About 30 percent of our engineering business comes from Asia. In Japan the type of work we see is very much diesel oriented, and electronics. In China the work tends to be on new petrol engines and hybrids. In Korea, we work on diesel engines for passenger cars and commercial vehicles. In India we have lot of work on diesel engines for commercial vehicles and small engines for three-wheelers, besides transmission.

Which are the companies that you are working with in India?
We are pretty tight on confidentiality, but I can tell you that our clients here include Tata Motors, Bajaj Auto, M&M, Force Motors and Greaves.

What’s been the feedback from the Indian automobile manufacturers?
It certainly has been the best year ever for us in terms of winning business from India. We have not finished yet. As a percentage India’s share of business currently stands at around four percent which translates to approximately 7 million pounds in revenue.

For how long has Ricardo been in India?
We have been in India for probably 20 years. Over the last year we have paid more attention to the Indian market. Our strategy is to ensure that we gave good portfolio of customers across the globe. This compensates the cyclical nature of the business. So the four percent business in India is very important to us. I would like to double this share in the next five years.

You have set up offices in Shanghai and Japan, but not in India?
It’s part of a plan. Ricardo’s home base was the UK. We then moved into North America and then to Germany three years ago. Two years back we opened an office in Japan. A year ago we did that in China and we shortly hope to open an office in India. It is purely part of a controlled global plan. What I really did not want was to open up offices in too many locations at the same time. I rather do that in a controlled way. It is the right time to do that in India.

Are your services available for component manufacturers also, besides automobile manufacturers?
Yes, absolutely. We are there for the whole value chain. We are developing a new hybrid vehicle for a Chinese company. This includes the vehicle and the components as well. We are developing the electronics, the electrical parts as well as all the mechanical parts of that vehicle. So we are actually there developing the whole supply chain. We have not targeted any such company in India.