‘We want to make India a hub of light electromobility and software solutions’: Anil Kumar M R

The Indian arm of Stuttgart-based SEG Automotive is a technology leader in starter motors, generators, start/stop and mild-hybrid fuel-efficient solutions for three-wheelers, passenger cars, light and heavy commercial vehicles. Its goal has been to enable automakers to shape a sustainable future through improving fuel economy and in turn reducing
CO2 emissions.

Now, it wants SEG Automotive India to become the export base for the group. The President and MD of Tier I auto parts supplier SEG Automotive India says the company is positioning India as an export hub of light electromobility and software solutions. In addition, there’s focus on increasing the localisation of electrification components in a big way. Autocar Professional spoke with Anil Kumar MR, SEG Automotive India President and Managing Director to understand more about the company's diversification and growth plans.

SEG launched its high-voltage (HV) range for light electric mobility at the beginning of this year. How has the response been thus far, and what are your plans to expand this range?

Undoubtedly, Auto Expo gave an excellent head start to our entire HV journey. We have already secured three major acquisitions in this category post-the Auto Show, of which two are major OEMs. And this puts us in a poll position currently in the domestic HV market for the electric light commercial vehicles (eLCVs) segment. Seeing the demand, we have planned to start mass production of the HV systems by the fourth quarter of this year. There are a few more customers for whom we are in the final stages of closing the acquisitions. Though the electric penetration here is about 2 percent as of today, it is also expected to go to double digits in the next three to four years.

Despite a buzzing start, the adoption rate of eLCVs is still very low in India, accounting for a meagre 1-2 percent. What kind of growth do you see in this segment in the near-to-mid term?

At present, the domestic LCV market stands at between 4,00,000 and 5,00,000 units. Within this segment, last-mile connectivity and cargo between 1.5 and 3.5 tonnes are the two major categories where electrification is catching up fast. And this is where we are making strong headway into this market. I agree that the penetration rate is next to nothing now, but this segment is poised to see above 10 percent penetration into EVs in the next three years.

Interestingly, we are seeing major traction directly from the big OEMs themselves. Another prime pull will come from the retrofitment market.

Can you shed some light on your production volumes and how much the company has invested thus far?

We have already pre-invested over Rs 100 crore for growth in the last two and a half years on capacity, which includes the big mounts, the hub motors, and the HV range. All these, put together, come closer to 1 million units. Out of this, almost 250,000 units are coming from HVs, and the balance, 750,000 units, are coming from light electric mobility, which is our volume driver.

The automotive industry is going through a dynamic phase. How does SEG plan to strategise and deliver on the demands of  this fast-changing industry? Are there any specific initiatives in place?

The strategy of SEG is the three 'B' strategy. The first B, which we call the base strategy, is largely about conventional starters and generators, where we have been the market leaders for over a decade now. Here is our clear approach: we would be the last man standing. It means that as long as IC-engine vehicles continue to be on the market, we will continue to be there for those customers.

Next is our bridge strategy, where we are focusing on hybrids and the aftermarket. There are certain major customers who have strongly opted for this, although the Indian market is not going strongly towards the hybrid. We have products in hybrids for both local and global markets.

The third B is the breakthrough in light electromobility. We have been a leading player in the last two years, with significant growth in the two-wheeler and three-wheeler segments. I'm happy to say more than 300,000 of our e-motors are in the field today, perhaps the highest by any other supplier in the market today. With the HV going into SoP in the fourth quarter of this year, I expect that 12-15 percent of our turnover will move towards electrification by 2025, and by 2027, this share will be around 35-40 percent.

What are the other domains that SEG is looking to diversify into?

Currently, software solutions and services are a very captive market for us. From this year onwards, we are opening up the software services and solutions to third parties. That means we will have external customers as well. And since we have strong connections with our OEMs and other automotive players, we would like to extend the services into all these segments.

We are also studying whether we can go beyond the automotive market to extend the software services. So, in the near future, our portfolio will be spread across conventional vehicles, electrification, which will include a complete portfolio of two-wheelers, three-wheelers and four-wheelers, and software solutions and systems.

What would be the broad domains of software solutions that you'd be planning to offer to third-party customers?

We are very strong in mechanical and electromechanical design. This is our strength. So, all the simulations support what our customers want; we can strongly support them and there are certain simulations like HIL (Hardware in Loop) and SIL (Software in Loop), which we already have invested in. This can also be used as a service for our customers. We also have a very strong team of engineers who are very good at embedded systems and CAEs. This can be an added value that we can offer to our customers.

What share of revenue is coming from exports, and how are you planning to strengthen your exports?

Our exports account for 30 percent of our overall sales currently. We are exporting starters and alternators to Europe, the Americas, Japan, ASEAN, and some other parts of the globe. We are also planning to export the e-mobility solutions of two-wheelers and three-wheelers soon to the rest of the world. Our focus is to make India the hub of light electromobility solutions, and our target markets will be Europe, Sri Lanka, Africa, and ASEAN.

Additionally, we would also aspire to be the export hub for software, which is, of course, India's strength. So, if we can provide software services and solutions not only for India but also for the globe, apart from SEG, where we are already providing a lot of services, we would like to expand. Going forward, we'll go stronger on that, as we want to make it an overall software solutions and services export hub.

This interview was first published in Autocar Professional's November 15, 2023 issue.