Transition To Disruptive Technologies Will Be Gradual

By Frank Ahlborn

Frank Ahlborn is Vice President, Marketing, Product Management and Customer Projects of SEG Automotive Germany GmbH. As a member of the management team he had a leading role in the spin-off of the complete Starter Motors and Generator Business from Bosch. As head of product management he was engaged in re-adjusting the product strategies of the Starter and Generator business of Robert Bosch GmbH. He has several years of experience as global key accounts manager for major OEMs responsible for sales and customer project management.

Change has become constant in the automotive industry with several disruptive technologies and the emergence of alternative and autonomous vehicles. The new mobility demands development of new components / systems / modules, technologies and joint ventures. These involve huge investments. As far as SEG Automotive is concerned, we have been making electrical machines for the last 100 years. The future is going to be electrified. It’s a huge opportunity for us as this market will widen. The challenge now is in battery-electric vehicles and hybrids that we are currently working on. Though disruptive technologies will come in, the transition would be step-by-step. We are very well positioned for this as we have the technology for the combustion engine.

We are ready with the technology for 48V which is now in production. We are on the job for the high-voltage market; the first wave has been occupied by the OEMs themselves, we are working to enter the second wave so we are in a good position to take advantage of the opportunities available in this market.

The second important point is from the investment and manufacturing approach. We have an excellent international production network; we will not invest unnecessarily in capacities which we do not see growing in the next couple of years. We would rather use our global capacities completely before looking at any further investments. We are able to vary in a prudent way and manage our investments for manufacturing by using global capacities. We strike a balance as each region may pull for investments. We are very careful in looking more at the global way than the regional way.

The powertrain market, when it goes from IC engines to electrification, will somehow shrink. There will be huge competition in the market, a challenge we will have to face. However, as a global supplier, we have proven in the past that in starter generators we have been successful; we are among the three leading suppliers in the world. So I would consider this as a challenge but nothing that should frighten us.

Mergers and acquisitions are part of our business plans and clearly investments would go towards electrification. There is no doubt about it. At the same time we are not going to ignore the conventional business. The important point is that we would keep the innovations running to the extent the customer is happy with, for the running of the business. Customers expect us to continue this as long as they produce IC engines. While they would minimise on this and keep it going, they would focus more on electrification. We believe it will have its time of changeover. It is already driven by the infrastructure requirements – the challenges that are emerging for e-mobility.

Drivers Of Investments

Transformation into electrification means we are stepping into software development. The electronic portion of our products will increase. These are definite triggers that indicate the direction we have to move and would drive investments. Our global footprint remains good but we would move from a product into a system where software and electronics get integrated.

We are already building up our own division for software. Right now our machines contain a good amount of software developed in-house. To enhance this we are open to going in for joint ventures as part of business reinforcement.

The sequence of investments will be on product and technology; machinery, investment, and production would follow. I would put people before manufacturing because people and technology go hand-in-hand. Unless we invest in people’s competencies, and motivate them, it will not trigger the results we want. We will take people and technology together to front-load ‘what next.’ Manufacturing will follow this the moment we have the direction and speed right.

Our long-term plan is to go along with the transformation of being a leading supplier for electrified powertrains. This is where we want to go. We will find our own way; maybe starting with smaller niche solutions, building up the market and then stepping out into bigger areas. It will be a very sustainable approach to grow our business, building it up step by step.

The ‘content per vehicle’ will be the matrix for any company to work on the growth strategy. With disruptions some companies will gain and some may tend to lose. For us it will be gain, though our products go in for IC engine-powered vehicles. Take for instance, our Boost Recuperation Machine (BRM) which is in production; we have gained in value while selling the BRM but on the other hand we are losing the generator, which is not required any longer (for e-mobility).

In some applications we even lose the starter because the BRM can start the engine by itself. I am not afraid as an e-machine producer that we are losing value per vehicle; I am sure we will gain in the future.

Overall it will be definitely a gain for us because we are moving from one motor to a bigger motor, and we are adding engine controllers with software as a value-add. The major growth drive of our business in the next five to seven years will be for BRM, and we are increasing our overall size.

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