Automotive Electronics, 2016

AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA AUTOMOTIVE ELECTRONICS 1AUTOMOTIVE ELECTRONICS Master Plan Development for Auto Components Industry in IndiaContents Foreword …………………………………………………………………………………………………………………………………… 3 Message from Secretary, Department of Heavy Industry, Government of India………………………... 5 Technologies and Segment Scope…………………………………………………………………………………………….… 7 Executive Summary…………………………………………………………………………………………………………….……… 9 Recommendations for ACMA and Government…………………………………………………………………………. 11 Global Auto Electronics Market and Megatrends Influencing the Market…………………………………. 13 Growth Opportunity Analysis – Short and Medium Term Technologies…………………………………….. 15 Action Plans for Indian suppliers – Short and Medium Term Technologies………………………………… 17 Sensors and Actuators………………………………………………………………………………………………………………. 21 OEM Feedback on Suppliers………………………………………………………………………………………………………. 23 Key Research Areas for Indian Suppliers – Long Term Technologies………………………………………….. 25 Competencies Required for Auto Electronics Manufacturing and Design………………………………….. 35 Embedded Engineering Services………………………………………………………………………………………………... 37 Testing Facilities………………………………………………………………………………………………………………………… 39 Software Verification and Validation (V&V)………………………………………………………………………………. 41 Case Studies……………………………………………………………………………………………………………………………… 43 Summary – Short and Medium Term Technologies....................................................................... 47 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 1The Capital Court, 6th Floor Olof Palme Marg,Munirka New Delhi 110 067, India Tel: + 91-11-26160315 Fax : +91-11-26160317 Automotive Component Manufacturers Association Of India acma@acma.in | www.acma.in Foreword We are happy to bring to you a report on the current and future opportunities in the burgeoning auto electronics market in India for automotive component manufacturing industry in India. Electronics Sector is a critical Sector of the Indian Economy. It is one of the pillars of “Make in India” and “Digital India” programs of the Government of India (GOI). Keeping in view that the Electronics Manufacturing Sector holds a great potential in the Indian context, and there has been a gap between the achievement and the potential of this sector. The Automotive Component Manufacturers Association of India (ACMA), the apex body representing the interest of the Indian Auto Component Industry in India and supported by Department of Heavy Industry (DHI) commissioned a full-fledged research in its efforts to map the current status and future opportunities for Indian suppliers in the auto electronics market. Electronics and Information and Communication Technology (ICT) are transforming the idea of mobility. The market for auto electronics is estimated to exceed 200 US$ billion by 2020. The use of electronics in automobiles is the single largest driver of change in the sector – nearly all automotive innovation arises directly or indirectly from developments in electronics. Most of the solutions designed to lower emissions, improve fuel-efficiency, increase safety and provide convenience services like infotainment for customers are dependent on electronics and associated embedded applications. Currently more than 75% of all electronics used in cars are imported. Concerted efforts from both the Government and the industry are required to propel the Indian auto industry into one of the critical GDP contributors in the near future. This exhaustive report developed by ACMA’s consulting partner, Frost & Sullivan, on the overall auto electronics industry in India to identify the high growth product markets within the overall auto electronics industry and does a deep dive evaluation of the existing ecosystem for these products. Systems from powertrain, safety, telematics and infotainment are covered as a part of this research. This study would help identify the appropriate initiatives needed for further developing the ecosystem for these high priority products and support suppliers in identifying the right opportunities in the short, medium and long term. The other objectives being • Understand the Global Mega Trends that are affecting the automotive electronics Industry • Understand the emerging automotive trends related to technology (engine, transmission, chassis, safety, and infotainment) at the cluster level only, including regulations • To outline the market opportunities that exist in the key global automotive regions for Indian suppliers and map the value chain Eastern Region : Room No. 4, Centre for excellence, Jubilee Road, Jamshedpur-831001 Tel +91-657-3203261, 224670-Extn -24 Telefax +91-657-2230035 Email : acmaer@acma.in Southern Region : 1-B, “Crystal Lawn”, 20 Haddows Road, First Street, Chennai - 600006 Tel: + 91-44-28330968/0949 Fax : +91-44-28330590 E-mail : acmasr@airtelmail.in Western Region: 80, Dr. Annie Besant Road, Worli, Mumbai -400018 Tel.: +91-22-24933507, 24975877, 24980502 Fax +91-22-24936527 E-mail acmawr@mtnl.net.in AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 3The Capital Court, 6th Floor Olof Palme Marg,Munirka New Delhi 110 067, India Tel: + 91-11-26160315 Fax : +91-11-26160317 Automotive Component Manufacturers Association Of India acma@acma.in | www.acma.in • To recommend a broad based strategy, policy, capability development approach to grow business opportunities for the industry, ACMA and Government We would like to place on record our appreciation for Frost & Sullivan for conducting this in-depth study. We are also grateful to our past presidents, ACMA member companies, SIAM and its members, Department of Heavy Industry, Department of Electronics and officials of the Government of India who have shared a wealth of their knowledge for this study. With best wishes, Dated: August 16, 2016 Arvind Balaji Ashok K Taneja President, ACMA Past President and Chairman, ACMA Committee for Knowledge Partner Engagements Eastern Region : Room No. 4, Centre for excellence, Jubilee Road, Jamshedpur-831001 Tel +91-657-3203261, 224670-Extn -24 Telefax +91-657-2230035 Email : acmaer@acma.in Southern Region : 1-B, “Crystal Lawn”, 20 Haddows Road, First Street, Chennai - 600006 Tel: + 91-44-28330968/0949 Fax : +91-44-28330590 E-mail : acmasr@airtelmail.in Western Region: 80, Dr. Annie Besant Road, Worli, Mumbai -400018 Tel.: +91-22-24933507, 24975877, 24980502 Fax +91-22-24936527 E-mail acmawr@mtnl.net.in 4 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAAUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 5Technologies and Segment Scope List of Technologies Considered Short Term Technologies Medium Term Technologies Long Term Technologies (Technologies readily available and (Technologies available and could (Technologies under development) could be implemented in be implemented in 3-5 yrs) 1-3 yrs) Intelligent Transportation System Reverse Parking Guide (RPG) Telematics (ITS) Tyre Pressure Monitoring System Automatic Transmission (AMT, In Car Entertainment (ICE) System (TPMS) DCT, CVT) Electric and Hybrid Vehicles (EV/ Anti Lock Braking System (ABS) Airbag Electronics HEV) Remote Vehicle Diagnostic System Driver Information System (DIS) LED based Headlamps (RVD) Fully Automatic Temperature Body Control Module (BCM) Electronic Stability Program (ESP) Control (FATC) Advance Driver Assistance Immobilizers Electric Power Steering (EPS) Systems (ADAS) Powertrain Management List of Sensors and Actuators Considered Sensors Actuators Crank Sensor Starter Solenoid Switch Cam sensor AMT Solenoid Coolant Temperature Sensor Wastegate Actuators Accelerator pedal Sensor/ Throttle Position Sensors Idle Air Control Valve Manifold Absolute Position Sensor (MAP) Canister Purge Solenoid Air mass flow (HFM) EGR Valve Vehicle Speed Sensor Power Steering Motors Sensors Power Sun roof Oxygen Sensor LED Headlamps Cooling fans Parking Sensor Engine Cooling fan TPMS (Tyre Pressure Monitoring System) sensor Electrical Fuel Pump Wheel Speed Sensor (WSS) Windshield Wipers and Washers Fuel Level Sensor Power Door Locks Ambient Temperature Sensor HVAC Blower Air Pressure Power Windows Variable Valve Timing Actuation Electronic Throttle Control Dashboard Guages Drivers Idle Speed Controllers Self Adjusting Motors Fuel Injector AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 7Total Automotive Industry: Technologies and Segment Scope 8 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAExecutive Summary Key Findings The overall opportunity available for suppliers in Auto Electronics (all Short, Medium Term Technologies and Sensors) is approximately INR 36,500 Cr by FY2020 Key Technologies • ABS, BCM, and Immobilizer are the key Short term technologies to be focused • Telematics, TPMS, and EPS are the key Medium term technologies to be focused • Parking, Cam, Crank, and Oxygen sensors are the key sensors to be focused Addressable Market (INR Cr): • Total addressable market for the key sensors considered is expected to be around INR 5,400 Cr by FY2020 Total addressable market for the key Short term technologies considered is expected to be around INR 10,500 Cr by FY2020 • Total addressable market for the key Medium term technologies considered is expected to be around INR 6,400 Cr by FY2020 • Total addressable market for the key sensors considered is expected to be around INR 5,400 Cr by FY2020 Addressable Market (INR Cr): 1-2 Years • Focus on manufacturing of: – Sensors: Ultrasonic, Hall Effect, Piezoelectric – Small Control Units and PCB Assemblies – Displays 3-4 Years • Focus on Mechatronics • Focus on Oxygen Sensors • Focus on complex ECUs and integration • Focus on In Vehicle Networking AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 9Recommendations for ACMA and Government With the conducive environment made by the GoI to promote auto electronics market in India and the increasing demand for auto electronics we expect more global auto electronics manufacturers to invest in India. India has received investment proposals worth over INR 1.1 trillion (USD 18 billion) in Electronics space since the start of “Make in India” campaign. In current scenario electronics for Auto application are predominantly imported and there is a constant rise in its trade imbalance. Lack of a component ecosystem is the major hindrance in the growth of indigenous auto electronics market in India. Growth of Auto Electronics in India is possible only when ACMA members and Government take some initiatives with clear focus on long term plans. Government and ACMA should aim at holistic development of the Auto Electronics industry by filling up all the gaps in the electronics ecosystem. Some initiatives to be followed by ACMA members to develop the Ecosystem for Auto Electronics are: 1. Focus on becoming end to end service providerin evolving areas such as ITS, Telematics, and RVD etc. 2. Capability development for Software Verification and Validation for developing robust sub- systems across program areas such as safety, powertrain and telematics 3. ACMA membership should include software engineering service providing companies such as KPIT, TCS, HCL etc. so that existing members could collaborate on new technology development 4. Existing players in mechanical components may seek to explore the related product ecosystem in mechatronics and acquire capabilities / build expertise through technical tie ups or research partnerships in the short term 5. Capability building and investing in technology research in electronics as automotive electronics is a long term game and expertise on certain systems are built over more than 5 years 6. ACMA members should focus on Sensors and actuators which have huge potential in the automotive field as well as have scope of diversification in other fields such as Industrial, Telecommunication and Medical 7. Organize events and brain storming sessions around auto electronics that will bring in various stakeholders including the government, software companies, semi-conductor manufacturers & automakers for charting out future roadmap for collaborative development 8. Focus on capability building for Embedded Engineering Services AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 11Initiatives to be followed by the Government to develop the Ecosystem for Auto Electronics are: 1. Set up automotive EMC (Electronics Manufacturing Cluster) possibly near auto hubs and incentivize manufacturing of sensors, LED clusters, PCBs and LCD Displays etc. 2. Building of consortia aimed at fostering the capability development for next generation systems such as autonomous driving, connected mobility etc. 3. Required frequency Bands be de-licensed for automotive use on non-exclusive, non- interference basis for public use of RF/ Radar based systems. 4. Manufacture microcontrollers in the country; the setting up of the two semiconductor fabs in the country would prove to be a great enabler in this regard. 5. Set up Testing facilities by government alliance for comprehensive testing of electronics assemblies/ sub assemblies; subsidize certification and critical testing such as EMI/ EMC, ESD 6. Support reputed academic institutions such as IITs/ NITs/ Research Institutes to introduce auto electronics/ mechatronics related courses to develop expertise in the field 7. Supplier ecosystem needs to be developed by providing incentives to small scaleindustries aimed at capitalizing on Short and Medium term technology opportunities 12 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAGlobal Auto Electronics Market and Megatrends Influencing the Market Technology development across vehicle segments has seen growth in leaps and bounds primarily in the Passenger Car segment. Usage of electronics content in cars started with the introduction of in car entertainment system, alternators, regulators and other electronics components. Other technological developments in the field of auto electronics were the result of Customer demand and Legislative Pull. Growing electronics content in a car is leading Global Auto Electronics market grow to $230 billion in 2020; up from $140 billion in 2010. With growing number of sensors and ECUs installation the overall cost of electronics in a car is expected to reach 30% by 2017 and 45% by 2030. A Modern Car has: • Over a thousand wires, weighs 45 kilos and measures a kilometre in length • An average of 60-100 sensors on board. Because cars are rapidly getting “smarter” the number of sensors is projected to reach as many as 200 sensors per car • Around 100 ECUs that control the electronics With highly dynamic market scenarios the Asia Pacific market is expected to drive the growth of Auto Electronics worldwide. Government mandate on emission norms and safety norms are the major thrust for the growth of electronics content in Powertrain and Safety programs worldwide. AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 13Introduction of electronic substitutes in vehicles with gradual phase out of mechanical components has fueled the growth of auto electronics market. Legislative and Customer Pull are leading to the advent of new technologies across vehicle segments (PV, CV, and 2W) such as ABS, Rear lighting control, Active Suspension and others. Ninety per cent of innovations in the modern car are based on new developments in electronics. Some of the key technologies expected to be focused by OEMs as well as suppliers across vehicle segments are: Radar Touch Screen Displays Digital Instrument Cluster Body Processor Rear Lighting Control Angle Sensor ABS Digital Speaker Active Suspension Traction Control Active Collision Avoidance System Fuses and Relays Suspension Compressor ESP Vehicle Computer GPS Immobilizer Seat Adjustment Regulated Catalytic Converter Digital Radio V-V/V-X Front Lighting Control Roof Module Engine Management Active Suspension Mega trends such as Urbanization, Connectivity, Emission reduction norms, increase in Active Safety features penetration, and others are driving the growth of technological development in vehicles. These megatrends will eventually accelerate the rise of new technologies across vehicle segments and across program areas. 14 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAGrowth Opportunity Analysis – Short and Medium Term Technologies Auto electronics industry in India is currently at a nascent stage and is dominated by the global suppliers. On an average around 65-70% of auto electronics requirements of OEMs in India is met through imports. Product conceptualization and designing of electronic components is primarily done by the OEMs internally while the child parts are mostly imported. Majority of the Indian suppliers are currently assembling imported parts. To reduce import burden and boost indigenous manufacturing of auto electronics components, comprehensive ecosystem assessment of certain automotive technologies based on their current and future potential is done andthey are classified into three categories (Short, Medium, and Long term) as indicated in the chart. Short Term Technologies Short term technologies ABS, RPG, Immobilizer, ICE, BCM, and DIS technologies as compare to Medium and Long term technologies have relatively high penetration across vehicle segments and are expected to generate revenue of INR 16,000 Cr by FY 2020. Know-how for these technologies is readily in the Indian market and some of the Indian suppliers are already developing these systems either in collaboration with a global player or on their own. With ABS expected to become mandatory for PV, 2W segment and the current mandate for Trucks N3 category (above 12 tonnes Gross Vehicle Weight) and buses in the M3 category (above 5 tonnes GVW and carrying nine passengers), it is expected to dominate the short term technology market by generating INR 7,801 Crs by FY2020 Size = Technology Potential (Revenue) FY2020 in INR Cr C A G R % , (F Y 2 0 1 Volume 6 FY2020 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 15Medium Term Technologies Medium term technologies Airbag, LED, EPS, FATC, Telematics, and TPMS are expected to generate revenue of INR 13,000 Cr by FY 2020. Medium term technologies have low penetrations in the current market and are suggested to be targeted by suppliers who have strong financial background and can make huge investment in developing these technologies. Airbag and EPS are expected to dominate the medium term technology market by generating INR 5,045 Crs and INR 5,529 Crs revenue respectively by FY2020. Size = Technology Potential (Revenue) FY2020 in INR Cr C A G R % , (F Y2 01 6 – FY Volume 20 Note: Potential represents summation of all vehicle caFteYg2o0ri2e0s Source: Frost & Sullivan analysis 20 (Units) ) 16 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAAction Plans for Indian suppliers – Short and Medium Term Technologies All the Short and Medium term technologies have varied levels of developed/ undeveloped ecosystem. Here we break down all the technologies into major sub components and based on the Design and Manufacturing capabilities of Indian suppliers we categorize action plans for them. Categorization is broadly done into five key actions; Develop Indigenously, Import and Integrate, Import and Value Addition, Technical Tie ups, and Value Added Service. Sub Components which are relatively easy to design and manufacture are supposed to be “developed indigenously” by Indian suppliers. Sub components for which technical knowhow is very restricted and there are constraints in domestic manufacturing are supposed to be “Import and Integrate” by Indian suppliers. Similarly for other categories too we recommend plan of actions for Indian suppliers which are depicted in the table below: Source: Frost & Sullivan analysis AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 17Source: Frost & Sullivan analysis Market Roadmap for Short and Medium Term Technologies Based on the sub component level breakup of the technologies and complexity in design and manufacturing we suggest market entry roadmap for Indian suppliers. We broadly suggest three roadmaps; a) Become Tier-1 supplier (where the technical know-how is readily available and system manufacturing is already being done by some of the players in India) b) Become Tier-2 supplier (where the technical knowhow is limited and sub components are procured by the Tier-1 suppliers for complete system manufacturing) c) Become aftermarket supplier (where aftermarket penetration of the product is high) 18 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIASource: Frost & Sullivan analysis Technologies such as RF, Transponder based immobilizer and RPG system already have good penetration in the Indian market, the technical know-how for these technologies is also readily available, hence these technologies could be immediately targeted by Small suppliers. Technologies such as TPMS, LED, FATC, Telematics, BCM, and ICE have medium complexity in the manufacturing and design and also the revenue generation is less, these technologies could be targeted by Mid-level suppliers. Indian suppliers have very limited knowledge on Airbag electronics, ABS, and EPS thus these technologies should be focused by large suppliers, who could make huge investment in building up the technical know-how of these technologies. AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 19Medium complexity technologies to be targeted by Mid level Airba g suppliers ABS LE EPS D FATC DIS TPM Telematics BC Technology S M IC Development E High Complexity technologies Complexity to be focused by Large Immo – RF (On a scale RPG Suppliers of 1-3) Immo - Transponder Low complexity technologies to be immediately targeted by Small suppliers Revenue by FY 2020 (INR Cr) Here Technology Development Complexity is calculated by studying Complexity in Manufacturing and Design Airbag Should be focused by getting into Technological partnership LED Technology Development FATC EPS ABS Efforts DIS (On a scale Telematics ICE of 1-10) TPMS BCM Immo – RF Should be focused RPG by Tier-1 Suppliers Immo - Transponder Revenue by FY 2020 (INR Cr) Here Technology Development Effort is calculated by considering Complexity in Technology Development and Investment Required for it (here investment required is calculated on a scale of 1-3) 20 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIASensors and Actuators Driven by wireless sensing applications and growing embedded controls, sensors and actuators are expected to grow at a rapid rate. Modern-day vehicles are equipped with new technologies which in turn are leading to the growth of Sensors and Actuators market. A Sensor and an actuator integrated with a microcontroller improves the reliability and durability of the entire system. Automakers (Indian and Global) are making India as an export hub and also ramping up the production capacities, this in turn is driving the auto components market. The charts below illustrate some of the key powertrain, temperature, level, and pressure sensors market in the Indian automotive market (chart 1) and some ofthe key actuators (chart 2). With growing demand for Powertrain management system crank and cam position sensors should be targeted by the Indian suppliers. Indian supplier’s focus on auto component manufacturing and sourcing to other countries is expected to drive the actuators market. Solenoid and Piezo Actuators to drive the overall Actuators market and could be targeted by the Indian suppliers. Key Sensors Revenue (INR Cr) and Volume (Mn Units) FY 2020 XXX CAGR Revenue FY 2020 3,879 503 503 151 237 262 604 151 431 85 132 252 161 94 9.9% 9.9% 9.9% 13.8% 21.3% 21.3% 9.9% 10.4% 24.1% 66.1% 36.0% 9.9% 28.5% 35.9% Volume FY 2020 14.36 9.24 5.03 5.03 5.03 4.74 5.03 5.03 4.03 4.03 1.70 3.31 3.22 2.34 Crank position Cam Coolant Accelerator TMAP Air mass Vehicle Oxygen Parking TPMS WSS Fuel Level Ambient Air Pressure sensor Sensor temp Pedal Sensor/ Flow (HFM ) Speed Sensor Sensor Sensor Sensors Sensor Temp Sensors sensors Throttle Position Sensors Note: 2 (for PV) Oxygen Sensors, 4 Parking Sensors, and 4 TPMS sensors are required in a vehicle Source: Frost & Sullivan analysis AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 21Key Actuators Revenue (INR Cr) and Volume (Mn Units) FY 2020 Revenue FY 2020 3 .8 0 3 2 6 .6 8 2 1 0 9 0 8 .4 0 1 8 .7 0 2 8 .5 1 9 .0 0 1 5 .0 5 8 .1 3 1 5 .0 5 3 .4 3 .6 5 3 8 .9 5 5 .9 0 2 8 .5 6 1 7 .3 3 2 .4 9 3 3 .2 5 2 6 .2 5 7 .4 0 1 .8 7 3 8 .0 2 Volume FY 2020 17.1 15.8 15.0 15.0 5.0 5.0 5.0 3.9 1.7 1.7 1.7 3.1 3.0 2.3 2.1 3.1 2.6 1.1 0.2 0.4 0.2 Starter AMT Waste Idle Canister EGR Power Power LED Engine Electrical Windshield Power HVAC Power Variable ElectronicD ashboard Idle Self Fuel Solenoid Solenoid gate Air Purge Valve Steering Sun Headlamps Cooling Fuel Wipers Door Blower Windows Valve Throttle Gauges Speed Adjusting Injectors Switch Actuators Control Solenoid Motors roof Cooling fan Pump and Locks Timing Control Drivers Controller Mirrors Valve fans Washers Actuation Source: Frost & Sullivan analysis 22 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAOEM Feedback on Suppliers Burgeoning cost pressure on OEMs is compelling them to increase the localization content in cars. OEMs are focusing on procuring components from domestic suppliers to avoid high import duties, and reduce logistics costs at the same time. OEMs are willing to work with Indian suppliers on auto electronics and want suppliers to develop solutions to showcase as well as improve system level understanding. Feedback of Vehicle manufacturers on Indian suppliers:  OEMs operating in India are more than willing to work with Indian suppliers in the area of automotive electronics. Indian OEMs (Tata, Mahindra, Ashok Leyland) have shown the highest interest in working with Indian suppliers  OEMs want suppliers to showcase solutions and come up with new systems that show improvement on different parameters such as design, efficiency, cost etc. over existing systems  Number of Indian and multinational OEMs have opined that Indian suppliers need to improve upon overall system level understanding and expect them to have expertise that goes beyond subcomponents  Non-safety critical program areas such as comfort and convenience, infotainment are two program areas where there exists maximum willingness to work with Indian suppliers  Quality and reliability are two concern areas for working with new suppliers for automotive electronics according to OEMs as even small issues may lead to recalls and can affect brand reputation  Future Indian suppliers have to showcase superior reliability through rigorous testing and validation OEM Willingness to work with Indian Suppliers: Indian OEMs (Bajaj Auto, Mahindra and Mahindra, Tata Motors, and Others) have high willingness to work with Indian suppliers over Foreign OEMs (Maruti Suzuki, Honda Cars, Hyundai, and Others). Foreign OEMs have set suppliers routed from their parent company; they preferably opt for the same suppliers, leaving very less chance for any new Indian supplier’s entry into their value chain. Indian OEM’s willingness to work with Indian suppliers is comparatively high on less critical program areas such as Infotainment, Comfort & Convenience, and Body Electronics over other critical program areas such as Powertrain and Safety due to high level of complexity in manufacturing and design of these domain components. AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 23Source: Frost & Sullivan analysis Indian OEMs Foreign OEMs Mahindra and Mahindra Maruti Suzuki Tata Motors Hyundai Ashok Leyland Honda Cars Bajaj and others Nissan Volkswagen and others OEM Perception of Vendor Capabilities: As India ranks up in the preference list of multinational players to set up state-of-the-art manufacturing facility, opportunities for multinational as well as Indian suppliers also increases in turn. Sensing the opportunities in Indian market, Multinational suppliers are expanding their presence further by getting into JV, technological partnerships, or by Mergers and Acquisitions. Multinational suppliers have an edge over Indian suppliers on most of the parameters such as Quality, Reliability, System Understanding, and Time to Market due to their global presence whereas Indian suppliers on the other hand lead in terms of Cost advantage over Multinational suppliers. Indian suppliers are perceived as strong players in the forging and machining of components over auto electronics understanding Source: Frost & Sullivan analysis 24 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAKey Research Areas for Indian Suppliers – Long Term Technologies Key Research Areas for Indian Suppliers in ITS Intelligent Transportation System is the application of advanced information and communications technology to surface transportation in order to achieve enhanced safety and mobility while reducing the environmental impact of transportation. Indian suppliers as explained below can focus on certain research areas such as Wireless communication, Computational technologies, Sensing technologies, Video vehicle detection, and Probe & smart vehicles.  Wireless communications - GPS, DSRC (Dedicated Short Range Communications), Wi-fi, Mobile communication  Computational technologies - Microprocessor modules with hardware memory management and Real-Time Operating Systems. Software applications including model-based process control, artificial intelligence, and ubiquitous computing.  Sensing technologies - State-of-the-art microchip, RFID (Radio Frequency Identification), and inexpensive intelligent beacon sensing technologies. Infrastructure sensors are indestructible devices that are installed or embedded in the road or surrounding the road  Video vehicle detection - Traffic flow measurement and automatic incident detection using video cameras  Probe & smart vehicles - "Floating car" or "probe" data collection for obtaining travel time and speed data for vehicles traveling along streets, highways, freeways, and other transportation routes. Global Transmission Outlook To curb global warming and improve fuel efficiency, OEMs as well as suppliers are working on the transmission system, and as a result diversification in transmission types is growing. As depicted in the chart below AMT is expected to gain momentum globally due to increased demand from markets like India & China. Most global suppliers are likely to set up local manufacturing units for AMTs in India in the next few years. Global AMT market is expected to increase from 0.88 Mn Units to 2.03 Mn Units by the year 2020. On the other hand, Hybrids and xEV are also expected to gain traction in the market; it is expected to grow at a CAGR of 47.1% by the year 2020. AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 25Note: All figures are rounded. The base year is 2015. Source: Frost & Sullivan *Volumes in million units Note: Only PV Volumes considered Growth of Automatic Transmission in India Figure illustrates the current and expected share of transmission in the Indian market , by 2020 AMT is expected to be the biggest gainer with market share growing from current 0.5% to ~10% followed by DCT from current 0.6% to 2.3% and CVT from current 0.3% to 2.0%. AMT penetration is expected to increase AMT & DCT poised to gain market share whereas stepped-AT to show weaker growth despite growth on overall numbers. Source: Frost & Sullivan analysis 26 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAKey Research Areas for Indian Suppliers in AT Transmission and Clutch actuators should remain the focus areas for Indian suppliers while long term partnerships on AMT ECUs could be forged with research companies. 2W AMT to be attractive in the short term in India. Program Select Lever • Used for selecting various drive modes, such as Neutral, Park, Drive. • This selector is also used for manually shifting the gears Transmission Control Unit Electronic control module which provides command for shifting  to both clutch and transmission actuator based on Gas pedal position Ignition Brake pedal position Engine speed Clutch position Load condition Shifter position Sub components (Typical) Microprocessor: Usually 32-bit MicrocontrollerSensors: 4x position, 4x speed, 1x temperature. 2x pressure Actuators Transmission Actuator • Actuates different gears as per input from transmission control unit • Fully automated or manual override modes are available Clutch Actuators • Activates/deactivates clutch, as per input from transmission control unit Sub components (Typical) • Actuator solenoids : 11 solenoids AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 27Electric Vehicles (EV) Growth Analysis As depicted in the chart below, China has emerged as a leader in EV sales in 2015 recording a growth over 60%, whereas Norway has the highest penetration rate globally. UK, Germany, Netherlands, Sweden France have experienced a growth between 30%-50% which indicates significant growth in the electric vehicle market. Electric Vehicle Growth Analysis by Country 2015 Size of the Bubble = No. of EVs sold in 2015 UK, Germany, Netherlands, Norway has the highest Sweden France have experienced penetration rate globally a growth between 30%-50% Penetration which indicates significant growth Rate in the electric vehicle market.  Netherlands China emerged as a market leader in 2015 Growth Rate Total EV Market: Growth Analysis by Country, Global, 2015 Source: Frost & Sullivan analysis India’s Connected 2 Wheeler Ather’s S340 e-scooter marks foray of connected vehicle technology into Indian 2 wheeler industry. Their e-scooter S340 is a cloud-based connected vehicle. The S340 comes with touchscreen dashboard and integrates cloud based data to help personalize the consumer ride experience. There is a S340 Mobile App as well which keeps the rider connected with the vehicle, to configure ride and profile preferences and sync navigation routes remotely. Some of the key features of e-scooter are: • 200 mm Front & Rear Disc Brakes • On board navigation • 3kW/ 5kW motor • 0-60 kmph: 11 Sec • Top Speed:72 kmph • Range per full charge:60 km • Fast Charging:80% in 50 minutes • Predictive analytics and aggregation of ride statistics enable customized recommendations. 28 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAKey Research Areas for Indian Suppliers in EV Thrust on green vehicles is expected to increase across the globe due to multiple initiatives taken by the Governments and OEMs to counter environmental issues rising at an alarming rate and also to solve rising fuel consumption and costs. To promote low carbon transport in India the National Electric Mobility Mission Plan (NEMMP 2020) was released by the Ministry of Heavy Industry and Public Enterprises. Recognizing the growing demand for Electric Vehicles, OEMs are gearing up with plans to include more and more number of Electric Vehicles in their product portfolio Indian suppliers could focus on Battery Management in the EV market. It is expected to emerge as a major scope for technology development. The key research areas include Battery Modelling, Battery Capacity Estimation, Energy management systems for electric cars, Battery charging, Influence of battery charging on power grid with the integration of renewable energy sources. Source: Frost & Sullivan analysis Key Research Areas for Indian Suppliers in Remote Vehicle Diagnostics (RVD) System Remote Vehicle diagnostics is the ability to remotely examine automotive fault codes and wirelessly communicate data to a server, where the information is stored, analysed and managed. Indian suppliers could focus on the competencies development for managing complete diagnostic centres - Web server, Data base, Vehicle specific details. • Passive & periodic Diagnostics • Facility of Vehicle initiated Fault notifications • High end systems including Prognostics • ECU re-programming for remote code updates • Remote management of vehicle recalls • End to end service providing AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 29Worldwide Electronic Stability Program (ESP) Penetration Increasing road fatalities and accidents has led to the demand for advanced safety and driver assistance systems worldwide. With very low penetration (4-5%) today, ESP has a huge potential in India in the next few years as government may mandate the use of this technology like in Europe and NA. The chart below illustrates worldwide penetration rates for PCs and LCVs <6T. Drives for e - bikes Based on production of passenger cars and LCV < 6t Source: Frost & Sullivan analysis, Bosch 30 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAKey Research Areas for Indian Suppliers in ESP One of the major reasons behind road accidents is vehicle skidding, and the solution to this problem is ESP. ESP protects the car with a number of systems along with an Antilock Braking System and Traction Control System. With growing demand for safer vehicles to prevent skidding, OEMs are expected to install ESP in upcoming cars in the near future. In present scenario Indian suppliers do not have the capabilities for complete ESP system development, but with the expected growth of ESP system in the Passenger Vehicle segment the Indian suppliers should focus on manufacturing sensors and actuators for ESP while long term focus should be on ECU development for ESP. Source: Frost & Sullivan analysis Key Research Areas for Indian Suppliers in ADAS ADAS are multiple safety systems aimed at increasing car and road safety. Depending upon the driving culture in India, suppliers have to work on dedicated ADAS for Indian Automotive market. Government has de-licenced use of devices or wireless microphones in the frequency bands of 36-38 MHz, 433-434.79 MHz, 302-351 kHz and 76-77 GHz. De-licensing of these low frequency bands has enabled the vehicle manufacturers to use this frequency through radar-based system and focus on selective ADAS features development. Indian suppliers should focus on the development of sensors and actuators primarily; Systems Integration, Validation and Communication Architecture to be focussed in partnership with established global player. AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 31Technology inside car • Components/sensors, actuators • Sensor optimization (cost, resolution, form factor, lifetime) • Road condition sensors • HAD certified sensors • Embedded laser scanner System integration & communication architecture • Development of centralized and decentralized architecture for real time assessment and actuation at low power and low computational efforts with redundancy • Vehicle – VRU communication • Data integrity • Negotiation between cars & cars and others • Embedded HW system architecture System design • Improve adequacy and efficiency of reliability/robustness test strategies (physics of failure, combined loads) • Comprehensive understanding of failure mechanisms • Implementation of virtual techniques (testing, FMEA prototyping) • Validation technology • Data base for use cases Standardization • Vehicle certification (market access, UNECE) • Traffic signs (signalization) • Car 2X signals • Vehicle functions (steering and lighting system) System integration and validation • Sensor fusion, environment models • Logistics for lifelong maintenance • AUTOSAR for HAD • Traffic scene interpretation • Design of tests • Sensor stimuli • Test (simulation) system 32 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAKey Research Areas for Indian Suppliers in Powertrain Powertrain being one of the most critical program area has very limited scope of opportunities left for Indian suppliers. Power train management revolves around one major goal: improving efficiency in ways that maximize driving performance while minimizing emissions However, in the long run Indian suppliers can focus on Engine Management and Emission Control System. A) Engine Management system: • Microprocessor : – Increasing Computing capabilities – Integration of enhanced signal processing and real-time control into single-chip systems • Sensor: – Integration of sensor cells with signal conditioning to produce “active sensing” device • Power control Integrated circuits : – Increase power IC content to broaden the variety of choices for consumers and accommodate the increasing demand for higher fuel efficiency as well as optimized performance Emission control systems: • EGR systems : – This involves recirculating a controllable proportion of the engine's exhaust back into the intake air. – Electronic Component – EGR Controller – Solenoid • SCR System : – This system uses a urea based diesel exhaust fluid (DEF) and a catalytic converter to significantly reduce oxides of nitrogen (NOx) emissions – Electronic component- DCU (Dosing Control Unit),- Urea Level Sensor,- Urea Quality Sensor • Alternate fuel : – Cleaner fuels with reduced sulphur content contribute significantly to lower emissions. – Growing interest in CNG/LPG/LNG – Other alternative fuels being tested or used on a limited basis include Biodiesel, Methanol and Ethanol, Hydrogen and Electricity. AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 33Competencies Required for Auto Electronics Manufacturing and Design Indian suppliers have strong hold on the hardware manufacturing/ forging/ machining of the components, but are relatively new in the field of auto electronics design and manufacturing. Due to the lack of technical know-how and unavailability of infrastructure support for Auto electronics manufacturing, most of the demand in India is predominantly met through imports from China, Korea, Taiwan or some other global destination. To seize the growing opportunities in the auto electronics manufacturing and design suppliers can focus on developing capabilities in the below mentioned areas: Capabilities required for Manufacturing: • PCB Manufacturing Techniques • SMT (Surface Mount Technology) based automated production lines • ESD (Electrostatic Discharge) precautions in handling electronic components • In circuit testing techniques • PLC (Programmable Logic Controllers) based automated techniques Capabilities required for Design: • Hardware design and testing methods and integration with the software • In vehicle Networking - Implementation and testing of CAN/ LIN/FlexRay/MOST network • Verification of analog, radio frequency, communication, digital or control electronic circuits, subsystems and systems (e.g., hardware, software, hybrid); applications development (software, security and programming) • Software life-cycle process including specification, design, implementation, change control, and testing • Proficiency in use of LabVIEW and MATLAB, Simulink tools for design and simulation of interfacing systems • Micro-controller based embedded controller systems in the field of automotive control • Sensors and Interfacing • Environmental factors & protection • Vehicle systems engineering, including how combinations of electronics and mechanical design are used to jointly achieve safety objectives • Cyber security of automotive electronic control systems • Existing relevant design and testing standards (SAE, ISO, IEEE, etc.) • Vehicle design and testing methods AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 35Embedded Engineering Services Indian automotive industry due to the legislative and customer pull is witnessing proliferating need for electronics and embedded engineering services across all vehicle segments. Embedded System is a combination of hardware and software, specifically designed for a particular function. Embedded product lifecycle services include the following activities:  System Engineering  Hardware Engineering  Software Engineering  Verification and Validation  Value Engineering Out of the above mentioned activities System and Value Engineering with lower capital investments requirement and lower competition offers Indian suppliers excellent growth opportunities in embedded systems space. Embedded System Activities – Overall Attractiveness and opportunities assessment Key parameters High for assessment of attractiveness and Preferability opportunities and matrix Complexity Low Low Capital Low Investment Competition Low Source: Frost & Sullivan analysis AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 37Challenges faced by the suppliers in Embedded Engineering services are:  Adaptability: Responding to customer needs rapidly, adopting new technologies and standards  Cost Control: Rising cost of creating tools and supporting multiple customers  Product Lifecycle: Shorter shelf life of products and technologies causing serious engineering and technologies disruptions  Time to Market: Enormous pressure on time to market for all products Focus area for Indian Suppliers: End-to-End system development, Multiple domain expertise, and Low engineering costs are the major areas to be focused by Indian suppliers in Embedded Engineering Services.  End-to-End System Development: System capability ranging from sensing technology to embedded firmware, software, and hardware design and development. For Example: Telematics, ITS, RVD, TPMS  Multiple Domain Expertise: Diverse expertise across various automotive systems to leverage and apply for greater resource utilization and value addition. For Example: ABS (Brake Systems), DIS (Vehicle Control Systems), BCM (Body Control Systems)  Low Engineering Costs: Continuous productivity improvement, improving and virtualizing lab resources, and expertise in design implementation. For Example: RPG, Immobilizer 38 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIATesting Facilities Increase in electrical and electronics content in a vehicle increases the possibility of these components being exposed to some external sources of energy causing interferences with other electronic or electrical equipment thus resulting in unanticipated changes in the system operation. Critical Tests Required for Electronic Systems: Three categories of tests primarily required for any electrical/ electronic system are EMI/ EMC, Reliability, and Durability Tests. EMI/EMC and Reliability Test facilities are available at ARAI (Pune), iCAT (Manesar), and VRDE (Ahmednagar) while the Durability Tests are primarily done by the Component Manufacturers/OEMs.  Types of EMI/ EMC Tests: Radiated Emission, Radiated Immunity, Conducted Emissions, Conducted Immunity, Transient Voltage, Electrostatic Discharge (ESD), EMI Scanning  Types of Reliability Tests: Combine Temperature and Vibration, Cyclic Temperature and Humidity, Altitude Tests, Water Spray Test, Dust Test, Thermal Shocks  Types of Durability Tests: Service Life Test, Endurance Test Current EMI/ EMC Testing Facilities: As part of NATRIP test centers at GARC Chennai, iCAT Manesar, VRDE Ahmednagar, and ARAI Pune have been finalized to set up the test facilities. Source: Frost & Sullivan Analysis AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 39Software Verification and Validation (V&V) Indian automotive industry is witnessing a major transformation of replacing mechanical components with electronics and software in all the program areas be it Powertrain, Safety, Body Electronics, or Lighting Systems. Around 80-90% of the innovations in the Indian automotive industry are software controlled innovations. Software systems are believed to account for up to 30-40% of the vehicle’s manufacturing cost. With this influx of electronics and software content in a vehicle the software quality levels has become the major area of concern for vehicle manufacturers. To mitigate the risks associated electronics and software intensive systems the need for software verification and validation has evolved. Software Verification: Process of evaluating the intermediary work products of a software development lifecycle to check the right track of creating the final product Software Validation: Process of evaluating the final product to check whether the software meets the business needs Steps involved in software verification and validation activities are as follows:  Developing test strategies  Developing validation and verification plans and scripts for vehicle subsystems  Ensuring testability of software requirement with formal techniques  Static code checks & analysis using tools like RTRT, Polyspace, QAC & PC-Lint  Test suite generation using scripts and modeling tools like Labview  Automated/ Manual Test execution and fault tracing  Defect identification and verification  Validation on vehicle simulators/ labcars  Validation of automotive software at various levels of testing starting from unit level until system testing Typical Tools used for software verification and validations are: a) Visual Test: Regression Testing Tool for GUI b) Labview, Test Stand: Test suite development c) INCA, Labcar, MDA, CANalyzer: Automotive Unit Integration and System Testing d) Perl, Tcl, Python: Test scripting languages e) Trace32, iONE, GDB, BDI: Debuggers AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 41Case Studies SEDEMAC Case Study SEDEMAC raised funding close to $7.5 million (about INR 50 Cr.) from Nilekani and existing investor Nexus Venture Partners. Intent of this funding is to invest in control solutions for the PV and CV segments. The SEDEMAC team plans to invest the funds to scale up and expand into the global market including China and the Product Range  Novel spark timing solution  Delivers “best possible” fuel economy  Throttle position sensor eliminated  Forward-looking solution: Algorithm applicable to future control technologies ISG, AMT, EFI, etc.  Implemented on 2 Million + vehicles (as on Jun ‘15); ZERO Failures  Estimated 20 Million Kg CO saved 2 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 43KPIT Case Study Company Overview • Headquartered in India • Listed on NSE and BSE INR 3,000 Cr. Revenues • 10,000+ Employees worldwide • 60+Patents filed in less than 5 years • 32% CAGR growth recorded from FY12-FY15 for Business in India • Winner of 9 Innovation Awards in last 3 years Business IT • Domain-led ERP, Surround ERP, Big Data, Analytics, Cloud, Warranty, PLM, Enterprise Cost Management Engineering • Powertrain, Safety, Infotainment, Diagnostics, Telematics, In-Vehicle Networking, MEDS, Body and Chassis, IoT, Products& Platforms Tools Platforms Products K-SAR - R4.0.3 solutions KIVI – In-Vehicle infotainment Battery Management Systems Vehicle Diagnostics tools KONNECT- Connectivity Intelligent Transport System Medini – Functional safety tool KPIoT – Big Data and Analytics Revolo – Plug in parallel Hybrid chain Platform solution Largest Transportation Technology company to provide Device + System Integration + Backend IT operations + On Ground Support • India’s 1st and largest UBS II compliant ARAI approved ITS • In ITS and UBS-II specifications due to ability to build robust products with military grade specs • Pan India implementation for NHAI including patrol vans, ambulances and toll trucks • Major Users of OBITS: CSTC (Kolkata), APSRTC (Hyderabad), PRTC (Puducherry), NMMT (New Mumbai), TMT (Thane), KDMT, SMT (Solapur), HRTC (Himachal), KSRTC (Kerala), ASTC (Assam), MBMT • 4000+ ITS Systems manufactured and installed on various vehicles; 3000+ UBS-2 Compliant Systems on road • Recommended National level ITS Architecture and Standardization guidelines to institutes like BIS and ASRTU 44 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAKPIT’s Electric Bus Solution • Indigenously Developed • IP is owned by KPIT • Designed specifically for Indian conditions • Over 5 years of experience in hybrid and electric technologies • More than 22 patents in the field of hybrids • MoU with CIRT for road testing and validation • Versatile system, variety of buses  Certified by ARAI (Homologation completed)  Applicable on a wide range of vehicles  Technology showcased to the Prime Minister of Malaysia for adoption on fleet of Malaysian Royal Police (discussion in process)  Numerous Innovation Awards • An intelligent, plug-in, parallel hybrid solution, developed by KPIT and Bharat Forge Limited • Both KIVI and Konnect have been sourced for production by Global OEMs and the platforms are expected to be part of models rolled out in 2017 • Certified by ARAI for JnNURM-II specifications AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 45Summary – Short and Medium Term Technologies RPG Summary RPG: It helps the driver sense when objects are in the vehicle's "blind spot," through a audio warning or a visual display. In basic system sensors mounted on the bumper detects the distance of obstacles from the extremities of the car and give an audible beep depending on the distance of the obstacle. A step up, a rear facing camera with a wide angle lens, mounted high and pointing slightly downward, give a broad field- of-view around the back of the car.Increase in demand for assistance in parking is driving the RPG market, it is expected to grow from INR 293 Cr to INR 1,080 Cr at a CAGR of 38.6% over next four years Major Components and Share by Value (%) • Ultrasonic Sensors: 20% • Controllers: 20% • Displays: 35% • Cameras: 25% C urrent Market and Forecast (INR Cr) AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 47Market Trends • CCD (Capacitor Coupled Devices) camera preferred for Passenger Vehicle application • Bumper mounted, water resistant, and vibration resistant sensors used for the PV application • Controllers suitable for mounting on body • Integrated Controllers and Buzzers are being used • Colored LCDs with mirror finish used as a part of Rear view mirror for Camera based RPG • LEDs displaying distance used for Ultrasonic based RPG Key Players • Interface Microsystems • Autocop • Xenos Technologies Technology Evolution Ultrasonic → Camera → Park Assist → Automated Parking Opportunity Analysis and Recommendations Short Term • Focus on manufacturing Ultrasonic sensor based RPG for aftermarket/ OEM • Focus on developing LED displays for the RPG Medium Term • Develop integrated solutions with Camera, Ultrasonic sensors, and LCD displays integrated in rear view camera Long Term • Build expertise on the development of Park Assist and Automated Parking System 48 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAICE System Summary ICE System: It is integrated infotainment systems in automobiles that deliver entertainment and information content. typical tasks that can be performed with an In car entertainment system include managing and playing audio content, utilizing navigation for driving, delivering rear-seat entertainment such as movies, games, social networking, etc.Increasing demand for Comfort and Convenience is driving the growth of ICE system in vehicles; it is expected to grow from INR 1,388 Cr to INR 2,848 Cr at a CAGR of 19.7% over next four years. Major Components and Share by Value (%) • Car Radio/ Head Unit: 60% • Speakers: 40% Cu rrent Market and Forecast (INR Cr) 2,690.8 1,326.2 61.7 157.2 FY 2016 FY 2020 PV Category CV Category Market Trends • Integrated Head units for Passenger Vehicle applications are expected to grow • For CV trends is shifting from Standalone units to integrated units • ICEs with touchscreen having additional features as navigation etc are being increasingly used for high end vehicles Key Players • Nippon Audiotronix Ltd • Blaupunkt • Alpine • Pioneer AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 49Opportunity Analysis and Recommendations Short Term • Focus on design and development of Single Din/ 2 Din Audio System for low end vehicles • Focus on integration of Bluetooth Connectivity, Steering mounted controls into the ICE system Medium Term • Focus on development of systems integrated with dashboards in consultation with OEMs for improved aesthetics and haptic • Build expertise for improved vehicle acoustics Long Term • Build expertise on the development of Park Assist and Automated Parking System 50 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAABS Summary ABS is an automobile safety system that allows the wheels on a motor vehicle to maintain tractive contact with the road surface according to driver inputs while braking, preventing the wheels from locking up and avoiding uncontrolled skidding. Government mandate on ABS for PV, CV and 2W segment to drive the overall ABS market, it is expected to grow from INR 1,203 Cr to INR 7,810 Cr at a CAGR of 59.6% over next four years. Major Components and Share by Value (%) • ECU (40%) • Wheel Speed Sensors (30%) • Modulator Unit (Hydraulic/Pneumatic) (30%) C urrent Market and Forecast (INR Cr) Market Trends • Body Mounted ECUs used for Passenger Vehicle applications • Chassis mounted ECUs used for Commercial Vehicle applications • Hydraulic modulator units used for Passenger Vehicle applications • Pneumatic modulator units used for high tonnage CV applications • For low tonnage CV applications Hydraulic units are used • Contact less/ Hall effect sensors are expected to grow in near future AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 51Key Players • Bosch • Continental • WABCO Technology Evolution ABS → TCS → ESP Opportunity Analysis and Recommendations Short Term • Build expertise to manufacture Wheel Speed Sensor. • Focus on Contact less sensors manufacturing. • Focus on setting up PCB manufacturing/ assembly facilities. Medium Term • Enhance capabilities/ capacities for Design and Manufacturing of Modulator Valves • Develop capabilities for Integration of Modulator Valves with the ECUs Long Term • Focus on design and development of Body Mounted and Chassis mounted ECUs by getting into technological partnership with the established players. 52 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIADIS Summary DIS: The display of the driver information system (DIS) brings together a wide range of different information items in the center of the cockpit and permanently indicates the vehicle’s current operating status. It is intuitively laid out, user-friendly, and allows the driver to stay focused on the road.Increasing human machine interface is leading to the growth of the DIS market; it is expected to grow from INR 819 Cr to INR 1,529 Cr at a CAGR of 16.9% over next four years Major Components and Share by Value (%) • Instrument Clusters: 60% • Displays: 40% C urrent Market and Forecast (INR Cr) Market Trends • Instrument clusters with 3D dials preferred • Stepper motor-driven clusters are being used predominantly • Increasing penetration of digital Instrument Clusters • Increased number of telltales • TFT Displays • Colored LCD displays • Integrated displays AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 53Key Players • Magneti Marelli • Visteon • Varroc • Denso • Continental • Delphi • JNS Instruments Technology Evolution Current Clusters (Analog, Digital, Hybrid) → Reconfigurable Clusters → HuD Opportunity Analysis and Recommendations Short Term • Develop Digital instrument clusters for 2W and 3W vehicle segment • Focus on development of Stylized clusters with aesthetic appeal • Build expertise to develop Integrated Clusters capable of displaying various vehicle parameters such as Fuel efficiency, Diagnostics, and Engine running conditions Medium Term • Enhance capabilities and capacities for Stepper motor driven clusters across all segment vehicles • Develop expertise on improving protection levels to IP65 and above • Focus on developing CAN compatible clusters for high end vehicles Long Term • Focus on Full TFT/ Reconfigurable Clusters by getting into Technological Partnership/ JV with established players Build HuD (Head up Displays) development capabilities for high end vehicles • 54 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIABCM Summary Body Control Modules (BCMs): An electronic control unit responsible for monitoring and controlling various electronic accessories in a vehicle's body. The BCM communicates with other on-board computers via the car's vehicle bus, and control load drivers – actuating relays that in turn perform actions in the vehicle such as operating power windows, power mirrors, central locking etc. Increasing demand for in- vehicle communication system, infotainment features, safety features, comfort, etc is expected to increase BCM market from INR 901 Cr to INR 1,764 Cr at a CAGR of 18.3% over next four years. C urrent Market and Forecast (INR Cr) Market Trends • Increasing options and utilities is giving room to more control functions in a BCM pushing OEMs to constantly work on increasing functionality • Although there is a high level of local value addition with regard to product manufacturing, there is a lot of import dependence with regard to components AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 55Key Players • Continental • Delphi • Bosch • Magneti Marelli Technology Evolution Entry Level BCMs → High End BCMs → Central Gateway + In Vehicle Networking Opportunity Analysis and Recommendations Short Term • Develop BCMs to replace individual controllers for low end cars • Design and develop BCMs indigenously for mid segment cars Medium Term • Enhance the existing capabilities of BCM designing for high end cars • Develop BCMs with Gateway and Networking functionality Long Term • Develop Modular BCMs for platform based approach to reduce cost and lead time • For CV segment develop BCMs suitable for Chassis mounting 56 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAImmobilizer Summary Immobilizer: It is an electronic anti-theft device. It is activated when the ignition key is removed and works in tandem with the engine control unit to prevent unauthorized starting of the engine as far as is possible. Government mandate on immobilizer would drive the immobilizer market and it is expected to grow from INR 281 Cr to INR 880 Cr at a CAGR of 33.1% over next four years. Major Components and Share by Value (%) • RF Based Controller • Transponder Based Controller C urrent Market and Forecast (INR Cr) Market Trends • RF-based Immobilizers are predominantly fitted in all the low-end cars • Immobilizers for certain high-end cars are imported from countries like Taiwan, Korea, and Japan AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 57Key Players • Delphi • Continental • Minda Valeo • Jay Ushin • Omron Opportunity Analysis and Recommendations Short Term • Develop capacities for RF based Immobilizer for Passenger Car and Small Commercial Vehicle Segments with basic fuel cut-off and starter relay cut-off system (regulation to mandate Immobilizer expected) • Focus on Integration of RKE with the Immobilizer Medium Term • Develop Transponder based Immobilizers with integrated antennas and control units • Focus on system integration of the Immobilizer Control Unit with the EMS ECU and the Vehicle Alarm System Long Term • Develop expertise on integration of the immobilizer control unit in the BCM • Develop capabilities for interfacing Immobilizer functions in the EMS ECU with encrypted signals to enhance vehicle security level (Thatcham rating) 58 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIATelematics Summary Telematics is a general term that refers to any device that merges telecommunications and informatics. Telematics includes anything from GPS systems to navigation systems. Increase in telematics application in the commercial vehicle category is expected to drive the Telematics market from INR 188 Cr to INR 751 Cr at a CAGR of 41.4% over next four years. Major Components and Share by Value (%) • Telematics Box: 70% • Service Packages: 30% C urrent Market and Forecast (INR Cr) Market Trends • Telematics Boxes are generally either imported or assembled with GPS and GSM modules • More than 85% of all telematics boxes are imported as major components in GPS and GSM modules are getting imported from other countries like Thailand, China. • Many local players import and assemble telematics boxes after importing major components AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 59Key Players • Bosch • Pricol • Magneti Marelli • Trimble • Continental • WABCO Opportunity Analysis and Recommendations Short Term • Focus on the assembly / assembly of telematics boxes • All components are already widely available in the import market • Focus on 3G / 4G communication protocol as this is the way forward for the industry Medium Term • Tie up with small software companies in service business and develop unique product solutions specific to the Indian market like fuel pilferage monitoring, driver behavior monitoring, etc. Long Term • Tie up with Telecom operators and become one-stop-shop solution providers for Telematics and be present across the value chain • Focus on innovative business models for various fleet operators based on end-user requirements 60 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIATPMS Summary TPMS: It is an electronic system designed to monitor the air pressure inside the pneumatic tires on various types of vehicles. TPMS report real-time tire-pressure information to the driver of the vehicle, either via a gauge, a pictogram display, or a simple low-pressure warning light.Demand for better fuel efficiency and Safety are leading the TPMS market, it is expected to grow from INR 17 Cr to INR 128 Cr at a CAGR of 66.0% over next four years. Major Components and Share by Value (%) • Tire Pressure Sensor: 30% • Display Unit: 30% • Controller: 40% C urrent Market and Forecast (INR Cr) Market Trends • Snap-in Valve Sensors or the Snap-in Valve battery less sensor are currently being used as Tire Pressure Sensors • Indirect TPMS being predominantly used in the aftermarket for PV category • TPMS penetration is high in the aftermarket primarily AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 61Key Players • Continental • Schrader • Pacific Industrial • Steelmate • TRW • Blaupunkt Opportunity Analysis and Recommendations Short Term • Focus on the aftermarket with the basic TPMS module • Develop expertise on development of Direct TPMS Module for the OEM market by technological partnership with the established global players Medium Term • Focus on manufacturing/ integration of the TPMS with other vehicle electronics such as integration of Receiver with the RKE module or the BCM module • Focus on developing LCD multi-color display Long Term • Focus on development of robust Indirect TPMS module • Build expertise to integrate the TPMS display into DIS by technological partnership with DIS manufacturers 62 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAAirbag Electronics Summary Airbag: It is a supplementary Restraint System for driver and/or passenger safety in case of a crash. A thin nylon bag in the steering wheel/ above glove compartment inflates in the event of an impact and prevents the driver/ passenger from hitting the steering wheel/ dashboard. Mandatory crash tests for new models sold in India from October 2017 under the Road Transport and Safety Bill to drive the overall Airbag market, it is expected to grow from INR 995 Cr to INR 5,045 Cr at a CAGR of 50.1% over next four years. Major Components and Share by Value (%) • Airbag Module: 40% • Airbag Control Unit: 45% • Crash Sensors: 15% C urrent Market and Forecast (INR Cr) Market Trends • Players such as Takata and Autoliv do the integration of Airbag Inflator Unit and Airbag in a module called as Airbag Module in their manufacturing plant in India • Electromechanical crash Sensors and Airbag control Unit are imported by the suppliers AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 63• Key Players • Takata Corp • Autoliv Inc • Rane TRW Steering Systems Private limited • Toyoda Gosei Co Opportunity Analysis and Recommendations Short Term • Build expertise to manufacture Airbag Module components (Inflator and Airbag) domestically • Focus on manufacturing of Crash Sensors by doing Technical tie up with the established players Medium Term • Build expertise for development of Airbag Control Units in coordination with the Airbag manufacturers • Build expertise on the integration of multiple airbags on vehicles Long Term • Focus on manufacturing of complete system by getting into Technical tie-up/ JV with Global players with strong hold in the market • Build expertise on Testing and Validation of the system 64 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAEPS Summary In the Electric Power Steering System, the electric motor (“E-motor”) is attached directly to the steering gearbox without a hydraulic system. Sensors detect the motion of the steering column and a processor module applies assistive power via an electric motor. This allows varying amounts of assistance depending on driving conditions.Increase in EPS penetration in the Passenger Car segment is expected to drive the EPS market from INR 3,143 Cr to INR 5,529 Cr at a CAGR of 15.2% over next four years. Major Components and Share by Value (%) • Power Steering Motor: 30% • Reduction Gear: 15% • ECU: 40% • Torque and Angle Sensor: 15% C urrent Market and Forecast (INR Cr) Market Trends • Almost 100% of EPS manufacturers for EPS in India assemble mechanical components of EPS • All the sensors, ECUs and actuators are either imported or supplied by the OEMs to the Tier 1 for assembly • EPS market is primarily driven by the Passenger Car Segment AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 65Key Players • Rane TRW Steering Systems • Sona Koyo • Showa India • Mando India Opportunity Analysis and Recommendations Short Term • Focus on technical tie-ups to manufacture the actuator for EPS which is bidirectional brushless motor • Focus on manufacturing of reduction gears, not all reduction gears are domestically manufactured Medium Term • Build expertise to manufacture sensors for EPS application – Torque Sensor – Steering angle sensor – Speed Sensor Long Term • Build expertise to integrate motor with the ECU or Torque Sensor with the ECU • Capability building toward understanding ECU specification for EPS 66 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIALED Summary A light-emitting diode (LED) is an electronic device that emits light when electrical current passes through it. Early LEDs produced only red light, but modern LEDs can produce several colors, including red, green, and blue (RGB) light. Recent advances in LED technology have made it possible for LEDs to produce white light, as well.Increasing energy efficiency awareness and growing Green energy drive is leading to the increase in LED market, it is expected to grow from INR 20 Cr to INR 592 Cr at a CAGR of 133.8% over next four ye Major Components and Share by Value (%) • LED: 50% • Driver circuit: 15% • Heat sink: 20% • Thermal interface material: 15% C urrent Market and Forecast (INR Cr) Market Trends • Heat sink and drivers are manufactured in India and are also imported from China • Light source with lens, reflector, and chip is entirely imported • LED Lightings are Imported to India AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 67Key Players • Rane TRW Steering Systems • Sona Koyo • Showa India • Mando India Opportunity Analysis and Recommendations Short Term • Design activity of driver circuits, heat sink, and LED • Focus more on assembly of Housing by integrating heat sink and thermal interface material Medium Term • Set up manufacturing units for heat sink, housings, driver, etc. • Setting up EMS for LEDs, there are companies like Instapower, Promptec, VIN but the growth of the market would need more suppliers for EMS Long Term • LED chips being the most expensive component in the product, there arises a need for setting up LED wafer fabs in the country • LED wafer fabs, along with the testing facilities, will not only prevent the import of sub-standard light fittings but also increase the local value addition • Alternatively, with rest of the components manufactured, LEDs could be imported & assembled locally and sold with OEMs & aftermarket 68 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAFATC Summary Fully Automatic Temperature Control (FATC) is the ability to monitor and control the cabin temperature at user-specified value without manual interventions. Growing demand for in-car comfort is driving the FATC market and it is expected to grow from INR 141 Cr to INR 688 Cr at a CAGR of 48.5% over next four years. Major Components and Share by Value (%) • Controllers: 50% • Sensors: 50% C urrent Market and Forecast (INR Cr) Market Trends • Stand-alone controllers being used • Sensors used in the FATC system are being imported and as well as domestically manufactured by the Tier-2 Suppliers • FATC system’s penetration is increasing in the Mid- Size segment cars AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 69Key Players • Sanden Vikas • Subros • Delphi • Denso • Mahle Behr • Visteon Technology Evolution Air Conditioning System → HVAC System → FATC System → Dual Zone Climate Control System Opportunity Analysis and Recommendations Short Term • Focus on manufacturing of: – Ambient temperature sensor – Sun sensor – Humidity sensors Medium Term • Focus on manufacturing of standalone controllers as a Tier-2 supplier • Focus on compact segment cars where HVAC could be upgraded into FATC Long Term • Build expertise for Integration of the FATC controller into the BCM • Build expertise on the development of Dual Zone Climate Control System for high end cars 70 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIAAbout ACMA The Automotive component manufacturers association of India (ACMA) is the apex body repressing the interest of the Indian auto component industry. Its active involvement tin trade promotion, technology up-gradation, quality enhancement and collection and dissemination of information has made it a vital catalyst for this industry’s development. Its other activities include participation in international trade fairs, sending trade delegations overseas and bringing out publications on various subjects related to the automotive industry. ACMA’s charter is to develop a globally competitive Indian Auto Component industry and strengthen its role in national economic development as also promote business through international alliances. ACMA is represented on a number of panels, committees and councils of the Government of India through which it helps in the formulation of policies pertaining to the Indian automotive industry. For Exchange of information and especially for co-operation in trade matters, ACMA has signed Memoranda of Understanding with its counterparts in Brazil, Canada, Egypt, France, Germany, Iran, Italy, Japan, Malaysia, Pakistan, South Africa, South Korea, Spain, Sweden, Thailand, Tunisia, Turkey, UK, USA and Uzbekistan. ACMA represents over 670 companies, which contributes more than 85% of the total auto component output in the organised sector. In the domestic market, they supply components to vehicle manufacturers as original equipment, to tier-one suppliers, to state transport undertakings, defence establishments, railways and even to the replacement market. A variety of components are being exported to OEM’s and after-markets world-wide. ACMA is inseparably linked with the auto component sector and hence forms the channel through which business contacts are established with the Indian Automotive Industry . ACMA is an ISO 9001:2008 Certified Association Further information and data on the Indian Automotive industry is available on the ACMA Website: www.acma.in For more information, please contact: Automotive Component Manufacturers Association of India 6th Floor, The Capital Court, Olof Palme Marg, New Delhi 110 067, India Tel: +91 11 2616 0315 Fax: +91 11 2616 0317 E-mail: acma@acma.in Website: www.acma.in AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIA 71About Frost & Sullivan Frost & Sullivan is a leading global strategy consulting company, headquartered in the US. Established in 1961, in New York City, the company today has 45 offices across the globe. It has six offices in India (Bangalore, Chennai, Kolkata, Mumbai, New Delhi and Pune) and three offices in the Middle East (Dubai, Manama and Dammam). The company has a domain knowledge approach to strategy consulting and has been working closely with multiple family run businesses/corporate groups in India, the KSA, and GCC, to develop their long term strategy and identify specific areas of business opportunity. To know more click on: www.frost.com 72 AUTO ELECTRONICS: MASTER PLAN DEVELOPMENT FOR AUTO COMPONENTS INDUSTRY IN INDIADisclaimer This Report prepared by Frost & Sullivan is on the basis of the scope of work agreed upon with Automotive Components Manufacturers’ Association of India (ACMA). The Report is based on analysis of secondary information and knowledge available in the public domain. While Frost & Sullivan has made all the efforts to check the validity of the information presented, it is not liable for errors in secondary information whose accuracy cannot be guaranteed by Frost & Sullivan. Information herein should be used more as indicators and trends. 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