India has been one of the fastest growing markets for Continental in the last 10 years: Prashanth Doreswamy
Q: What is your own outlook on the Indian automotive industry?
A: I think it will peak in the next five years for both passenger cars and CVs. GST is having an effect and there is movement towards MHCVs as well. India is also becoming an attractive manufacturing hub with vehicles exported from here increasing as quality levels have become accepted globally.
Q: In this scenario where do you see Continental fitting in, in the future? Where will you get the traction from?
A: We are very well placed in terms of clean, safe and connected mobility. Our divisions are well structured to address these three growth areas for which we have products well suited for India. We see growth across these three divisions equally.
Q: Large companies like yours talk of content per vehicle; it can be passenger cars, two-wheelers, CVs, etc. How has that been going for Continental?
A: We have been growing well across all the three divisions. The market is moving towards this with more sensors coming in, the number of air bag units and electronic control systems for cars increasing; these are the growth areas. In vehicle dynamics, apart from conventional hydraulic braking systems, we see growth coming from ESC. It’s yet to peak for both passenger cars and two-wheelers but by 2019 it will be 100 percent of the vehicles. By 2020-21 customers will be looking for ESC as an option. The next safety feature will be the electronic parking brake. Regarding ADAS, it’s a little early for India in terms of full automation; the emerging markets are just getting into Level-III. But we can still find innovative products like pothole detection and cruise control that would be good for Indian markets.
Q: As you mentioned, comfort, convenience and safety are the driving forces for increase of content in vehicles. So what kind of growth will you see in future? Beyond the inflexion point where do you see the sweet spot?
A: It will be in the connectivity space. In the Interiors connectivity space there are still lots of innovative products today that Continental makes; for example, for connected vehicles to be used in smart cities. Safety is another aspect for which we have many products.
Q: Do you mean innovative products will drive more content per vehicle for Continental?
A: Yes, certainly.
Q: In this scenario what is the role played by the Tech Centre in India?
A: The role played by it is key as we are utilising across all business units and divisions – Chassis & Safety, Interiors and Powertrain. The other growth area would be electrification where we have been working further on the charging side of the business; building up the efficiency in charging. That is another area where we see potential beyond 2025.
Q: From 2010 onwards, Continental has been saying that revenue from other markets is shrinking while from Asia it is expanding. How is India in the scheme of things?
A: Continental has been in India for 10 years and we are proud of what we have achieved since then. That is why our investments here continue to grow and we have strong faith in the Indian economy and markets combined with our customer commitment. We see a lot of potential here, the next three to four years is going to be really substantial.
Q: Is the growth here faster than in other markets?
A: Certainly, yes. India has been growing for us faster than the Indian market as a whole as well as other markets for Continental.
Q: Does that mean Continental’s growth in India is faster than in other markets elsewhere?
A: It’s very difficult to compare, the reason being those are very developed countries. We say our GDP is 7.5 percent while theirs’ is 1.5 to two percent. That is because they have already achieved much and are practically at the saturation point. The projected vehicle growth for them in 2018 is one percent going from 97 to 98 million; that is a big number with the content per vehicle much higher. India is also growing with high volumes and content per vehicle on the rise. India has been one of the fastest growing markets for Continental in the last 10 years.
Q: In which division of Continental do you see more traction in India, and why?
A: It’s difficult to pick one as we are seeing good traction across all the three divisions. In both emissions and ABS, we have a strong presence, meeting all regulatory requirements. With India going to be the biggest two-wheeler market in the world, we have our products lined up.
Q: Technology development in CVs is going much faster than in passenger vehicles. What is your contribution to CVs?
A: Our focus predominantly has been on the passenger car side; all our efforts have been on growing and developing it. CVs are a potential area that we will be looking at, going forward; we are already present here but the content per vehicle is less.
Q: What are your short-term and long-term plans?
A: Continental has three Tech Centres in Mexico, Romania and India. The contribution made by India is well recognised in terms of the efficiency and innovations being developed here. This is certainly a growth area where we would harness the talent available for embedded software systems. In a few years India will become the centre of competence for many product lines.
Q: From the manufacturing point of view, would you be increasing your footprint here?
A: Today we have nine plants across India – four rubber and five automotive. We are very well located in terms of customer operations. As volumes go up we will expand our footprint.