Webasto, one of the top 100 suppliers to the automotive industry, is a global innovative systems partner to almost all automobile manufacturers. Its core business areas include sunroofs and panorama roofs, convertible roofs and parking heaters. It has consistently set trends in technology and design. Headquartered in Stockdorf,near Munich, Webasto Group has over 50 locations around the world. More than 30 of themare manufacturing plants. The company has recently forayed into new areas of business. At IAA 2018 the company made the world premiere of its flexible and scalable battery system for small commercial vehicles, trucks and buses. A particular advantage of the system is its modular design, which shortens the product development process time.
T Murrali of AutoParts Asia caught up with Dr Holger Engelmann, Chairman of the Management Board, Webasto SE, along with Vikas Prasad of Webasto Roofsystems India. Edited excerpts:
Q: What made Webasto to enter flexible and scalable battery system for small commercial vehicles, trucks and buses?
Engelmann: In 2015 we looked at all the current trends of autonomous driving, e-mobility, globalisation, automation, etc and we asked ourselves what all this means for our business units and how would we be affected by these trends of the future. We found that our main products like the sun roof, panorama roof, convertible roof and others were positively affected and we had to strengthen and further develop our current business units to innovate and bring out new solutions for our roofs like ambient lighting, switchable glazing and other functions. Our advantage is that we have a very stable base we can rely on to engender the right solutions wherever required.
We looked at different areas and decided that we are not that involved in autonomous driving and connectivity but in e-mobility there are components that would well fit to our competencies like the battery system where we have to integrate big components precisely into the body of the car, truck or bus. We have a global production footprint with a global supplier base and thermo management knowledge, all the right ingredients to also offer batteries; what we didn’t have was the real conversion knowledge about battery systems. To do that we builtup a very strong team of over100 people, technical experts from the industry; we combined their expertise with our inherent competencies for success. We ventured into the market with an initial focus on Europe and China.
Q: When companies expand product line they look at allied segments, as a wheel manufacturer venturing into brakes. For Webasto battery is no way connected to its existing product portfolio; how did you decide on what to do? Where did the thought come from?
Engelmann: The thought came from the trends and e-mobility. We believe that e-mobility would have a bright future; we have seen it also to some extend with Tesla. The question was how we could participate in the upcoming trend of e-mobility. Could we produce electric motors, converters, power electronics and batteries?
Q: In these four, your strengths are more in the other three than batteries.
Engelmann: We don’t see it like that. The producers of motors, converters or power electronics have their own strengths in the existing market. They may cater to other industries but can easily come into the automotive market on seeing its size and growth potential. It’s basically combining our different strengths to exploit the market. We already have our first big contract for batteries from a bus producer in Europe; the SOP is 2019-20 so we will go into production end of next year. The second line will be on the standard battery that fits into the frame.
Q: How are these two different for the OE segment and for the Aftermarket?
Engelmann: Actually the battery is more or less the same. But in comparison to batteries which are developed for one specific vehicle, our standard battery system is a modular system which can be fitted in a bus or car; trucks have a standard frame in Europe and America. For those companies who have smaller production volumes we can provide plug-and-play if required. We have the same strategy in China for Sunroofs; we also have a standard panorama roof for pure Chinese producers who did not want to invest in Capex and R&D.
Q: Where will you set up the plant?
Engelmann: The first one will be in Germany as our customer is operating nearby; we will introduce the first battery there. We are also opening up a facility in China with R&D and testing. It will be there because we always produce close to our customer plants. Big components like batteries or sunroofs would be too expensive for long transports.
Q: In China, will it be initially testing and research followed by production in phases?
Engelmann: We have got the first contract in Europe; we have teams in Europe and China. The next order could be from China. We have strategic cooperation with Samsung SDI for Europe while in China we will receive the battery cells from Wangxiang A123.
Q: What could be the compelling reason for customers to choose Webasto for batteries while full-fledged and focused battery suppliers are available?
Engelmann: I don’t think there are enough battery suppliers competent to produce a really reliable battery system; we have seen problems cropping up in China. The question is whether suppliers have the willingness and engineering capacity to really cover the whole market as this market has three segments: OEMs who may produce batteries on their own; cell producers like Samsung and LG who do battery assemblies but will go for large volumes since their focus is to sell battery cells rather than the system; and the third is the specialised suppliers like us who cater to segments with lower volumes where we can develop and customise for customers who need partners as they do not want to realise projects on their own. By customizing we adding value to the overall battery systems. It could be 50:50, 80:20 or 20:80 depending on the customer. Today, we get more requests to customise; we will have to take it step-by-step.
Prasad: The cell producers are making cells and the battery producers, batteries, but the integration of the management system for the heating and cooling of the batteries is lacking. Surprisingly some OEMs in India have approached producers for supply of the thermal management system. So we have stepped in as we are an automotive company that understands automotive requirements for electronic integration with the CAN / LIN systems. The other ones are purely power generating systems but we make the overall system, that’s why we have a niche in the market. It is our USP.
Engelmann: We also have the electric heater (High Voltage Heater) and can combine it for both heating and cooling to balance the battery for a temperature of up to 20 degree Centigrade.
Q: You have a presence in India but I don’t know if it is mature enough to introduce EV. I am sure you would have leveraged the capabilities of your presence in India. Can you elaborate?
Engelmann: Overall, we believe in India as it is a growing market that will be good for Webasto. At this point of time our product portfolio does not fit very well in the Indian market but we are confident it will develop over time.
In China back in 2001 we had initial problems but later it became a very big market for us; we have the same hope for India. We will try to introduce new products and customise them for our Indian customers; we have to adapt and find the right solutions for India. We believe the Indian market will be the second largest after China. We have to sustain our pace here.
Q: Will your R&D in India leverage growth further?
Engelmann: We will use application engineering in India where we will apply technologies to position our products in the market.
Q: Now that you have the high-voltage heater and modular battery, do you see scope for increasing your product portfolio in the e-mobility segment?
Engelmann: Our target is to go towards a turnover of €5 billion by 2020-21 from the €3.5 billion of 2017. Of this, about €0.5 billion would come from the other business segment. We need to get more orders by exploring new markets like India. And we also built up our charger business which is another globally growing market.
Q: Which are the markets you have not ventured into as yet but that you are looking at? Where do you plan to enter soon?
Engelmann: With our current product portfolio, we are present in all markets. The regions we would look at are India, South America (Brazil, Argentina) and South East Asia (Thailand, Cambodia). We expect India and Brazil to come up quickly. Russia is also good but the market dropped very heavily due to sanctions and problems of currency. These are future growth areas where we are trying to develop the market. It is only a matter of time before these markets mature.