Is India willing to invest in Automotive R&D?

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The panel delves into India’s current position in automotive R&D, addressing challenges such as cost, price sensitivity, and consumer preparedness. The speakers argue that while there is a growing willingness to invest in the sector, this commitment must extend to tiers 2, 3, and 4.

Researchers are working on creating lightweight and durables materials that helps cars achiever efficient fuel consumption. New R&D initiatives also focus on making plastics that can be recycled, helping to reduce the environmental impact of vehicles, and are also figuring out how to use plastics to make cars smarter and safer; against this backdrop, the ET Polymers conference of Global Conference on Plastics in Automotive dived into the realm of ‘Driving Automotive Innovation through Research and Development’. The session was moderated by Rahul Kamat, Editor, B2B Division, Worldwide Media, and comprised of Christopher Marsh, Head of Surface Solutions, ContiTech, Continental India; Kaushalya Gaonkar, General Manager, Sales and Marketing (Mobility Group in India), Eaton Industrial Systems Pvt Ltd.; and Uday Narang, Chairman, Anglian Omega Group, and Omega Seiki Mobility.

This discussion began as Kamat asked Christopher to share his views on the difference with which people perceive R&D in international markets and Indian markets. 

Marsh responded that having spent five years in India, he perceives no significant difference. He noted that Prime Minister Modi introduced the ‘Made in India’ initiative, and in Marsh’s observation, India has progressed to a stage where the term could be replaced with ‘Engineered in India.’ Many technologies are not just manufactured but also developed within the country, with numerous companies establishing excellence centres here. According to Marsh, the key disparity lies in the haptics—the tactile and sensory experience. He pointed out that while the product quality may be comparable, the touch and feel, especially with premium car manufacturers in Europe, differs significantly from the standards in India.

According to him, the interior stands as the second most crucial design element in a vehicle. When a customer opts for a car, the initial focus upon opening the car door is directed towards its interior. In this domain, India is still undergoing developmental strides.

While discussions often revolve around price sensitivity, it’s essential to recognise that this concern is not exclusive to India. It prevails across various markets, be it the US or Europe. There’s a need for a shift in perception, emphasising a balance between sustainability, quality, and cost. Adopting a philosophy encapsulated by the three Ps—People, Planet, and Profit—can guide this approach.

When asked whether these processes seemed to have been borrowed by the Indian market from the western countries, Narang stated that price sensitivity is everywhere, but the price sensitivity here is different from the price sensitivity in the other markets, and ‘Make in India’ doesn’t mean that we don’t learn from their experiences, successes, and even failures. He stated that processes are in a state of evolution, guided by a ‘think global, act local’ perspective. The approach is to assimilate knowledge gained worldwide and implement it locally by building and developing in India. Consequently, in terms of processes and systems, he encouraged Indian manufacturers to adopt a longer-term perspective. The advice is to not merely meet immediate needs but to explore the wonderful opportunities presented globally. With a youthful population, abundant opportunities, and a vast market, the suggestion is to shape the country through engineering, using processes, and promoting the ‘Make in India’ initiative.

Talking about new processes, and innovations that are a game-changer in the economy, Kaushalya shared that there is a knowledge of the automotive, missing in electrical, and knowledge of electrical which is missing in automotive, and Eaton has blended it together. An example of this integration is the development of a resettable fuse for automotive vehicles. In traditional cases, when a fuse burns out, replacement is necessary, but Eaton’s innovation allows for a reset. 

These technologies are becoming region-agnostic in his view, and in India, there are currently 2,000 to 3,000 individuals engaged in global engineering platforms. The advantage lies in having a robust engineering team that validates the maturity of the technology, making it applicable and promising in the Indian context. The team has already worked on these technologies globally.

In the context of electric vehicles (EVs), the key considerations are efficiency and safety. Kaushalya emphasised that a company capable of harmonising these two aspects effectively could potentially be a game-changer in the industry.

 

Following this, Kamat inquired about advancements in technology or research aimed at reducing the weight of engines, given their significant impact on a car’s overall weight, with the goal of enhancing safety and fuel efficiency.

Marsh responded by noting that engines are indeed undergoing a size reduction. Technological evolution is trending towards employing three cylinders and a turbocharger instead of the traditional four cylinders, maintaining the same power output. Regarding batteries, Marsh mentioned that OEMs feel compelled to lighten their vehicles, leading to the removal of certain features. As an example, he cited the removal of a 10-inch screen from a premium vehicle to avoid surpassing a weight threshold that categorizes it as a commercial vehicle rather than a passenger vehicle.

Marsh shared a relevant statistic, indicating that for every 10 per cent reduction in a vehicle’s weight, there is an associated 5-6 per cent increase in its range, translating to improved mileage.

Narang articulated a vision for the future, expressing a dream where the world is devoid of traditional engines. Instead, he envisions a landscape dominated by electric vehicles, hydrogen-powered vehicles, and other advanced technologies for the benefit of future generations. Although he aspires for a country free of traditional engines, he acknowledged that engines would persist, but anticipates a significant reduction in their size within the next 5 to 10 years.

Kaushalya explained that achieving improved efficiency in commercial vehicles involves three key aspects. First, he highlighted the significance of application, emphasising that a low power-to-weight ratio and a smaller engine size result in reduced speed when a truck carries a heavier load. Upgrading to a larger engine enhances both fuel efficiency and speed.

Secondly, Kaushalya pointed out the potential for more power-dense engines, suggesting a focus on increasing power without compromising efficiency.

The third aspect involves the lightweighting of engines, aiming to use alternative and lighter materials. These trends reflect a shift in the commercial vehicle industry towards smaller engine sizes and higher efficiency.

Continuing the discussion, Rahul posed a question about the balance between design, appeal, and practicality when creating sustainable products.

Marsh responded by underscoring the significance of design as the forefront of customer appeal, acknowledging that compromise on design might not always be straightforward. He went on to highlight Continental’s commitment to developing a circular product with zero emissions. Marsh emphasized that OEMs prioritise sustainability across the entire product lifecycle, aspiring to achieve net zero emissions throughout the supply chain—from tier 4 suppliers to the OEM factory—and extending the conversation to the product’s afterlife.

Kaushalya proposed that numerous technologies are actively contributing to sustainability. Additionally, he emphasised that existing technologies could be made more efficient by minimising wastage. From an electric vehicle standpoint, Kaushalya noted that improving design can lead to a reduction in copper content, thereby enhancing sustainability.

Rahul then directed a question to Uday, focusing on collaboration among research institutes, government bodies, and companies. Narang emphasised the utmost importance of such collaboration, stating that Omega Seiki Mobility has been established on this foundational principle. He advocated for national or local alliances, and international collaborations with United States, Europe, Taiwan, Japan, and Korea. According to Narang, India can align itself with these regions, leveraging the wealth of inventions already made.

Narang specifically mentioned collaborations in the EV space, highlighting his company’s alliance with a partner from France in the hydrogen domain. He expressed anticipation, stating that in January-February, he would showcase a development from India—a vehicle capable of covering 400 kilometres on a single charge of hydrogen.

He noted the continuous evolution in battery technology, citing his own experience: when he began, the battery charging time was 45 minutes, which later decreased to 15, and now it’s down to 5 minutes. The future, he remarked, holds unpredictable wonders. Comparing it to an ultramarathon, he emphasised that everyone needs to participate collectively in the early stages, and while anyone has the potential to emerge victorious in the end, the overarching victory will be for India.

Rahul then posed a crucial question to the panellists, addressing the issue of a reluctance to allocate funds for R&D. Narang expressed his willingness to invest in R&D and noted that while significant spending is happening at the top levels, it’s crucial for these investments to trickle down to tiers 2, 3, and 4. Drawing a comparison with Japan’s heavy investments in innovations and new products, Narang observed a nascent change in India, attributing it to the emerging startup culture in the country.

Offering his personal perspective, Narang shared his ambition: for every product manufactured by a large company, he aims to manufacture five, emphasising that this is the key to growth. Furthermore, he challenged the perception that R&D always entails higher costs, asserting that one must continually think about ‘What’s next?’ to dispel the myth that R&D is invariably an added expense.

Regarding Continental, Chris highlighted the substantial investment the company makes in R&D. He pointed out that they have established a laboratory at their Germany plant specifically designed for extensive testing of products across various parameters, including elongation and durability. Chris underscored the critical role of R&D in the supply chain, given the high demand from OEMS and customer expectations regarding product longevity and warranties. He mentioned that even during economic recessions or cost-cutting measures, R&D remains a protected area and is typically the last to face compromise.

Kaushalya pointed out that in tier 2 and tier 3, the percentage allocated to research R&D is relatively small. In comparison, Europe dedicates more than 5-6 per cent of spending to sales, and the Americans typically allocate 3-4 per cent. Despite this, Kaushalya noted that Indian OEMs are performing well. However, he raised the example of R&D activities appearing to occur in the U.S., while the funds are actually spent and debited from India. To address this, Kaushalya highlighted that Eaton has six global innovation centres, with the India centre leading the way.

Christopher mentioned that the proficiency of Indians in English serves as a compelling selling point from the customer’s perspective. He noted that India possesses abundant resources, well-trained individuals, both in terms of brainpower and manpower. The advantage of being able to communicate in a widely spoken international language attracts business from numerous countries around the world.

In terms of consumer demand, Narang noted that some of the most prominent startups have secured substantial funding but have failed to produce safe products, sometimes attributing the blame to the customer. Nonetheless, he acknowledged that there is consumer demand in tiers 2, 3, and 4, with people in these segments having knowledge about EVs and their latest technological offerings. Narang stressed the importance of understanding the educated customer base and highlighted the necessity to build products for rural India to truly fulfil the nation’s aspirations at scale.

Kaushalya also concurred that Indian customers are educated, inquisitive, and prone to questioning what they don’t agree with. He noted a shift in consumer behaviour, and in the process of designing products, they consistently consider the readiness levels—whether it’s the readiness of the technology, the engineer, or the customer. Kaushalya emphasised the interdependence of these three elements, stating that unless they align, achieving success is challenging.

Chris wrapped up the discussion by emphasising the importance of ‘customer centricity.’ He highlighted that every customer is unique, especially in a dynamic market like India, and it is crucial to provide precisely what the customer desires.

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