Complexity often presents an opportunity. The growing electronic content in present-day vehicles has created a need for electronic control units (ECUs) that help process the plethora of information received from various sensors and then pass that on to actuators.
The highly critical nature of various vehicle functions such as engine control modules and antilock brake system (ABS) controllers or airbag deployment calls for a growth in demand for ECU test equipment. Furthermore, with Indian carmakers, including subsidiaries of global companies, looking at additional exports to mitigate the effects of the current downturn and to meet Euro 4 emission norms along with enhanced fuel efficiency demanded by domestic car buyers, the market for advanced ECUs with embedded systems can only grow. That’s where ETAS with its comprehensive and integrated tools and solutions for development and service of automotive ECUs, fits the bill.
Set up in Bangalore in June 2007, ETAS Automotive India, a wholly-owned subsidiary of the ETAS Group, a global provider of end-to-end solutions in ECUs to the automotive industry, is optimistic about exploiting the demand coming from the sizeable growth in the production of passenger and commercial vehicles. ETAS supplies a comprehensive portfolio of standardised development and diagnostic tools that cover the entire development and service lifecycles of ECUs in present-day vehicles.
ETAS pursues a strong global orientation with regional offices in all major car-producing countries. ETAS Automotive India, its most recent offspring, provides services and individual solutions including support, training, and engineering, enabling just-in-time responses to local corporate clients. Also, increasingly stringent emission standards sustain a growing demand for ECUs in passenger cars and commercial vehicles. According to industry analysts, India’s market for automotive electronics is predicted to grow by 22 percent over the next few years. It will approach 4.5 billion euros by 2011, and the market for development tool solutions alone would increase by up to 52 million euros.
Wolfgang Sienel, managing director of ETAS Automotive India, sees a lot of potential for development tools in India. “In today’s automotive domain, electronics are the major driving force responsible for around 70 percent of innovation, compared with a mere 30 percent in the traditional area of mechanics. It stands to reason that the rising complexity in automotive electronics will create new challenges.”
He adds: “Gone are the days when cars used a single ECU. To achieve the performance, safety and comfort prescribed by regulations and demanded by users, modern cars rely on various ECUs for engine management, ABS, vehicle stability control, automatic transmission, and so forth.
Interconnecting the respective ECUs creates a distributed computer network onboard a vehicle. Inherent complexities notwithstanding, the new challenge in automotive electronics lies in the need to deliver reliable solutions that preclude failure in the field. Statistics show that this task appears far from trivial: Between 2003 and 2006, the number of recalls of vehicles with software problems in the US market has more than tripled to a contingent of 8.7 percent. ETAS tools enable our customers to handle the increasing complexity in automotive electronics and deliver vehicles of the highest quality with shorter lead time.”
Good growth in Asia-Pacific
ETAS has maintained a strong presence in Asia-Pacific since it set up operations in Yokohama, Japan, in 1998. Having initially serviced the Chinese market from that location, ETAS opened a subsidiary in China in 2005. The company continues to make significant progress.
“When one compares the automotive market in China with that of India, identifying the major players is quite difficult in China. There are currently a lot of them, and it is not clear who will still be around, say, two years hence. In India, by contrast, the structure is much clearer. We have leading OEMs in the market, who are consolidating their position by extending their development capabilities also in the area of automotive electronics,” Sienel explains.
“Since starting our operations we have strengthened our ties with existing clients and established relationships with new ones. As of today, we can state that we are serving virtually all major companies in India’s automotive domain, which includes a wide range of OEMs, Tier 1s, and service providers. And because of its growth potential, the OEM business is especially important to us.”
“Indian OEMs are currently in the process of securing increasingly sophisticated expertise in the area of automotive embedded software. As a benefit to our OEM customers in India, we now share with them the knowledge and skills we have gathered in the course of working with OEMs all over the world. As another benefit, our consulting and coaching services enable our clients to avail themselves of our process knowledge and development skills, which in turn makes their development processes more efficient,” Sienel adds.
Elaborating on his company’s product range, Sienel explains, “Our tools can not only be utilised for a specific project, such as an engine or platform development, but they can be reused on subsequent projects as desired. To our customer, the benefits of this scalability comprise a compelling argument. Regardless of the solution deployed in a vehicle or system utilised, we can adapt our tools – as can our customer – to any new project. This renders his application versatile while at the same time future-proofing his investment.
A customer’s investment latitude for the acquisition of our product will be as wide-ranging as his individual requirements. The resulting solution, which invariably depends on customer needs and specifications, can range from a few hundred to more than 100,000 euros. While the requirements of many customers tend to be quite similar, the configuration chosen in each case may vary, with customisation impacting the price point. Yet another factor to be considered is the area of application in which a development process or tool is being used. We therefore offer a variety of tools suited to the different stages in the development process, always tailored to the customer’s requirements.”
Sienel continues, “We are fortunate indeed to be the first company specialising in automotive embedded systems to move to India. In other countries, we have competitors in different areas of our product portfolio. Our product offering is very broad-based because it supports the entire lifecycle of ECU software. There is virtually no competitor who can do exactly what we do.”
Customer-centric strategy
From its Bangalore office, ETAS Automotive India currently covers the entire country. This year it plans to open an office in Pune which, along with Chennai, has become an important hub in the automotive powertrain area. Commenting on the potential of the Chennai market, Sienel says, “We don’t have an office there as yet, although that would certainly be a viable proposition. Our plan is to set up our second location in Pune in 2009. In terms of Chennai, we’ll just have to see how the situation develops in the next few years.”
Providing an insight into the company’s marketing strategy, Sienel says, “We have a small marketing team in place. What is important to us is the technical expertise we are able to bring to bear in India. Our current staff of 12 will increase to around 15, with the major focus of our presence being on the technical side. We are basically looking for people already experienced in the development of embedded software for automotive applications. Their most desirable professional profile would ideally include previous work in that specialty.”
Concerning the difference between its sales force and that of other companies, Sienel remarks, “We have a couple of sales people who have extensive expertise in the automotive domain. These are not pure sales people but have a technical and/or engineering background, and this is very important because they need to understand the customers’ requirements at the technical level. To some extent, our
sales team uses a consultative approach
because we need to furnish our clients with
best-practice information that we have developed through working with other clients. In their advisory capacity, our people need to convey the ‘look and feel’ of best practice to many of our OEM customers who are taking their first cautious steps. And while OEMs are now trying to establish R&D for the development of embedded vehicle systems on their own, they don’t want to completely rely on their suppliers as they have in the past. They try to develop their own IP and knowledge, and that requires appropriate skill sets and tools. This is the point where we can come in and support these customers by identifying what they actually want to do and supporting them in finding the right solution”, adds Sienel. “We aim for mutually productive long-term associations as a foundation for a lasting business relationship. Understanding an individual client’s requirements also allows us to offer him the best solutions,” Sienel continues.
On the subject of the growth rate of ETAS Automotive India, Sienel affirms, “We are not only doing quite well, but ours is the strongest growth rate among all of the ETAS offices in other regions." He points out that “with ever-tightening emissions standards and statutory regulations, the major markets for four-wheelers are under significant pressure to deploy electronic engine management systems. And this is what endows our products with even greater market significance.”
Sienel is optimistic about the future growth rates in ETAS’ powertrain area. “Powertrains is a highly developing market, and we will be developing apace with the market, if not better. In fact, ETAS is the first company in its segment with its own subsidiary in the Indian market, and we will probably sustain a 20 percent growth rate over the next two years. Again, thanks to our local presence, we can better serve our customers, and this may well result in a stronger growth rate in the powertrain market.
“Right now, OEM development departments are straining to gain expertise, and they are looking for partners to support them in this endeavour. Again, as the market leader for development tools in the powertrain area, we already have the skills and the knowledge, and it’s only natural that they partner with us to make their work more efficient. I think this is the ideal combination and a win-win situation for both sides. On one side, we are able to bring our technology to our Indian OEM customers. On the other side, they are able to achieve the results much faster than they would using the conventional approach.”
Tata Motors and Mahindra & Mahindra are already major ETAS clients. “To Tata Motors we are providing ETAS measurement and calibration tools for adapting the parameter settings of the ECU software for specific engines.” In addition, the company has established business ties with most leading OEMs. For instance, it supplies measurement and calibration tools for a very wide range of applications to truck, bus and engine manufacturer Ashok Leyland.
“In the case of one of our major clients, which is also an ECU supplier, our tools are used in several of its projects both in India and the US. This client is apt to use our tools for developing its ECUs, and its own customers will very likely use ETAS tools to calibrate their ECUs,” says Sienel. Because ETAS tools are not restricted to four-wheelers or specific areas such as commercial or passenger vehicles, the company is also active in the two-wheeler segment. Its solutions can be deployed wherever there are electronically controlled engines and/or the need for embedded software onboard a vehicle.
ETAS has established its own development quality standards, and the company is ISO certified. It has also received CMMI certification for its software development. In short, the company ensures the continuous improvement of quality on an ongoing basis.
“Our R&D,” Sienel adds, “is globally organised. Our major R&D department is located in Germany, but if we have to do some specific R&D, like in the sense of moving closer to the customer, our global organisational network can deploy R&D also at other ETAS locations.”
Growth opportunity
The European market, where ETAS already enjoys a significant market share, is highly developed but saturated to some extent. As a result, growth rates in Europe are not anywhere close to those achieved in China or India.
“We see significant growth possibilities in India and China and that is why we saw the need to concentrate our activities on these emerging markets. As far as India is concerned, our focus is not only to bring products to the country’s market, but to gain a thorough understanding of the requirements of our Indian customers. In other words, in this very unique market, we want to be able to offer solutions that really meet their needs. Our goal is to offer a product portfolio – quite likely enhanced with extended solutions—that specifically caters to the needs of our Indian customers. ”
With regard to tool localisation, Sienel suggests, “The industry is thinking globally,
and it is not a geographical thing. But there is a need for the customisation of our tools, as I mentioned earlier. For example, Indian customers have different requirements than their counterparts in Japan or the US. That’s why we have a local engineering team that handles the customisation of solutions and adapts them to the needs of our OEM customers.” The investment ETAS has made in India barely a year ago is already bearing fruit. “From our Bangalore office, we are able to share a wealth of skills and knowledge with the automotive industry in our host country. The successful cooperation with many OEMs and clients proves that this expertise is highly valued and appreciated, and this is the main value we are bringing to India,”
Sienel concludes.