Global light vehicle production could reach 83 million units in 2021 – Anil Kumar, SEG Automotive India

Anil Kumar, the MD and President of SEG Automotive India, speaks about how the pandemic helped the company learn and adapt, while also outlining how the situation affected volumes globally.

The pandemic has had a big effect on the Indian automotive industry, and to some, on a personal level. The situation comes at a time when the country is looking to transition to electric vehicles, as most automotive component manufacturers supply parts to EV makers. SEG is one such company that supplies components globally and for Light Electric Mobility (LEM).

In a conversation with Anil Kumar, the MD and President of SEG Automotive India, Express Mobility learns how the slowdown in the automotive industry has affected SEG, and how it helped the company learn to overcome situations.

How have you dealt with the pandemic both on a personal level as well as company?

The current pandemic has affected every sphere of economic activities globally; the automotive industry is  not an exception. In 2020, the global light vehicle production was down by -16% to 74 Million vehicles  from 89 Million vehicles in 2019. Light vehicle production in India was at 3.25 Million units in 2020,  which was -23% compared to 2019. In 2021, as per the latest forecasts, we expect the global light  vehicle production to reach 83 Million units at +10% over 2020. In India, the light vehicle production in 2021 is estimated at 3.8-4.0 Million units, at a growth of 17-23% over 2021.

At SEG Automotive India, safety of our employees is on top priority, and we have taken all possible steps  proactively, both within the company and outside, to keep our employees protected. A task force  consisting of legal, medical, operations, employee health and safety personnel was set in place to  handle the new normal. This task force was responsible for setting up new manufacturing practices  ensuring social distancing, with suitable modifications on the assembly lines. In these challenging times, our business partners are also affected with the pandemic and resources to manage the fluctuating  demands, and by sharing the best practices, we are also ensuring that our business partners adapts to  the new normal for the safety of their associates, and is able to meet the ramp-up requirement and  new launches. The pandemic also has created several bottlenecks in the supply chain, not only local,  but also global. We are dealing with this in a very agile way by de-risking certain components with  multiple sourcing.

On the Customer side, with continuous engagement, transparent updates on the projects, handling of  pandemic, and going the extra mile to meet their requirement, we continued to build on the trust of our  customers. As an additional preventive safety measure, we at SEG Automotive have successfully initiated a  vaccination drive for all our employees and their family. Sense of responsibility towards our employees,  customers and the business partners is one of our key guiding principles to our Mission.

The pandemic had temporarily stalled and affected normal operations across every industry.  Automotive is not an exception. We at SEG Automotive always believe every adversity has an  opportunity. On this front, to handle the supply chain complexities and development of new products, we have explored new ways to support our customers. For example: Enhancing the rate of localization, virtual validations with real life conditions, adopting digitization and virtual methods in all our processes Etc.

The pandemic has significantly enhanced the rate of transitions to these alternate approaches,  displaying Resilience in operations. The pandemic has also brought in a significant change for mankind, the need to recognize and value healthier practices and discipline, caring for the environment. On a  positive note, the sense of gratitude has increased, which otherwise was taken for granted. On the  operations front, the pandemic has also taught us new things, which were deemed impossible in the  past, like work from home concepts in a manufacturing sector, virtual meetings, training and audits.  Etc.

Which all OEMs do you supply to in the EV space? 

In general, we supply to virtually all global passenger car and commercial vehicles OEMs. We also have  strong bonds to local OEMs, for example focusing on light electric mobility (LEM). LEM in India is gaining pace considering the drive, usage pattern and TCO benefits. The light vehicles  like two-wheeler and three-wheeler, are transitioning faster towards electrification, due to already  positive total cost of ownership (TCO) and the usage conditions like last mile connectivity or delivery  applications.

To cater to this segment, SEG Automotive India has co-developed efficient system solutions together  with the German headquarters. The EM platform with a series of mid-mount machines starting with a  peak output of 2kW and ranging up to 10kW, is developed to meet the needs of the high performance and  high speed segment. While the Hub mount platform with output ranging between 850W to 1.2kW is  designed to meet the needs of low speed and city speed applications. These locally manufactured  platforms are built on a modular concept, enabling easier upgradation, and offers efficient, reliable drive  solutions for the light electric vehicles. The platform offers benchmark efficiency throughout the  operating cycle and benefits the end application with increased range, thereby further reducing the  total cost of ownership.

These highly efficient platforms, combined with our locally manufactured transmission solutions,  robustly built to meet the varied needs of final application, offer one-stop powertrain solutions for the  light electric vehicles. The system’s high power density combined with compact packaging with great responsiveness, offers a fun driving experience. The drive control system ensures functional safety  according to global standards, providing safe operation at all times. Specific protection features and  increased robustness enable these machines to easily withstand the tough operating conditions on  Indian roads. With these system solutions, SEG Automotive participates in various segments, like e-rickshaw, e-auto and e-2wh segments like low speed, city speed and high speed. Being a leading player,  SEG Automotive is already in series with many customers and with some of them in advanced stages  of development. The customer base includes both the prominent ICE OEMs and Start-up’s.

What do you think of the electric vehicle growth in India? 

Covid-19 has disrupted the routine functioning of every sector, making the government and business  to re-look into strategies for sustainable outlook. While the entire globe works towards recovery of the economy, the focus is largely shifting towards personal hygiene, safety, sustainable cleaner and greener  planet.

In this scenario, the sale of light electric vehicles in India, which has already proven to be a positive  business case with lower total cost of ownership, is also estimated to pick-up. The consumer  preference for electric vehicles will also be supported by the good air quality indexes, which most of the  cities witnessed during the lockdown.

With the increased concern on personal hygiene and social distancing norms in public areas, the e-commerce activities are also expected to see a further boost in the post Covid-19 scenario, stimulating a new set of opportunities for the electric vehicles. In the first five months of 2021, the EV segment has witnessed stronger sales of light electric vehicles  compared to 2020, at +60% over previous year. While the first quarter sales without the impact of  pandemic and the lockdown is at +30%.

Looking at the TCO benefit a light electric vehicle offers to the end consumer and being environmentally friendly, we strongly believe in the growth of light electric mobility in India. As per our current estimates,  we expect at least 5-10% of two-wheelers sold in India to be electric by 2025, while the transition on  the three-wheelers to be much ahead at about 15-20% of electric three-wheelers by 2025. In addition,  the recent amendment by the government of India to the FAME scheme is a welcome move. An increase in incentives for the two-wheelers will certainly help in reducing the acquisition cost and making electric  two-wheelers more attractive.

How difficult or easy is it to make components for a specific manufacturer based on their designs? 

At SEG Automotive, the key product platform development takes place on a global scale with  participation of every region with market and customer requirement inputs. These platforms are  developed with thorough analysis based on our customers’ current and future needs and analysing the  legislative roadmaps in all regions. The platforms are built with local participation and application  development according to unified global quality standards.

We keep our promises to the customers in development, launch and time to market of new product  applications. We keep improving our business processes with an aim of serving our customers in a more  efficient way. Customers are our focal point in all our actions. With our agile response, we win our  customer’s trust and continue to remain as their preferred partners, thereby retaining our position as a  leading player in the market.

At SEG Automotive India, the research and development team with its 30+ years of local experience in the Indian market is capable of adopting global platforms for local needs, while developing innovative  solutions for specific local requirements (e.g., protecting the starter motor against field abuse by  innovative thermal protection feature). The customer dedicated application teams ensure launch of  robust products with the shortest lead times. The state-of-the-art research and development centre is  globally integrated to meet local and global requirements.

The Indian R&D team has also co-developed together with the German headquarters, the e-motors  ranging up to 10kW, required for the emerging light electric vehicle market in India. Our global R&D,  headquartered in Germany, is developing e-motors for hybrid and high voltage applications. The electric  motors and controllers are developed with a modular approach for light electric mobility. This modular  solution is easier and quicker to adapt to the customer requirement with minimal changes on  application software and interfaces. The modular solution from SEG Automotive also supports the  customer in easy upgrading to higher power ratings and achieving economies of scale for  competitiveness.

How hard has the pandemic hit SEG with respect to sales as well as innovations on hold? Any  fresh investment being planned? 

The pandemic has certainly affected the volumes in the market across the globe, and to a certain extent  that correlates directly to our sales. But the impact has been lesser compared to the market, thanks to  our pipeline of acquisitions done in the past. This has helped us to add new customers globally and in  India during BS6.

Despite the pandemic, we continued our efforts in product development keeping our promises to the  customers and readying for the upcoming legislation. We strongly believe in the long-term prospects  of the Indian Automotive market and the light electric vehicle segments, and the product innovations  for key sectors were accelerated during the pandemic.

For the light electric mobility, our latest EM platform with series of mid-mount machines starting with  a peak output of 2kW and ranging upto 10 kW, is developed to meet the needs of high performance and  high speed segment. For the needs of low speed and city speed applications we offer the Hub mount  platform with output ranging between 850W to 1.2kW. These locally manufactured platforms are built  on a modular concept, enabling easier upgradation, and offers efficient, reliable drive solutions for the  light electric vehicles. The platform offers benchmark efficiency throughout the operating cycle and  benefits the end application with increased range, thereby further reducing the total cost of ownership.

These highly efficient platforms, combined with our locally manufactured transmission solutions,  robustly built to meet the varied needs of final application, offer one-stop powertrain solutions for the  light electric vehicles. The system’s high power density combined with compact packaging with great  responsiveness, offers a fun driving experience. The drive control system ensures functional safety  according to global standards, providing safe operation at all times. Specific protection features and  increased robustness enable these machines to easily withstand the tough operating conditions on  Indian roads.

While electric mobility is gaining popularity and proving beneficial in the light mobility space, the internal  combustion engine continues to play a significant role in passenger car applications in the years to  come. For this segment, SEG Automotive’s efficient solutions like the start-stop motors, high-efficiency  generators, and the 48V hybrid solutions, offer improved fuel economy and CO2 reduction.

What is the current plant capacity and have any new facilities been set up? 

Principles of lean drives manufacturing at SEG Automotive. The ‘lean line design principles’ used in  manufacturing lines are globally standardized and the processes are released globally by lead plants  within the international production network. The need for capacities are reviewed frequently and is  addressed effectively with the help of our International production network, ensuring our valuable  customer’s requirements are met.

SEG Automotive is actively shaping the automobile industry’s journey from the combustion engine to  electrification by delivering efficient solutions for CO2 reduction – regardless of the powertrain  technology. We continuously evaluate the product gaps and manage our portfolio by investing in new  technology for the future. One such technology recently has been the highly efficient electric mobility  solutions towards electrification of two-wheelers and three-wheelers. We have already started on this  journey and would bring in new technologies for further CO2 reduction in ICE vehicles while upgrading  the electrification portfolio.

While light electric mobility is gaining momentum in India and we are investing in new capacities, the  majority of the Passenger vehicle segment in India continues to be powered by ICE. As per the current  estimates, even by 2027, greater than 90% of the light vehicles will be with ICE powertrain in India. And  for this segment, we continue to invest on new technologies/capacities that support the conventional  ICE powertrain to be more efficient – for example start/stop and mild-hybridization. Our new facility at Hosur will be operational in the 2nd half of the current year.

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