'The phone and the car will merge into one in the near future': Visteon CEO Sachin Lawande

Sachin Lawande, Global CEO, Visteon. A Fortune 500 company, auto-components maker Visteon counts Mercedes, BMW, Tata Motors and Mahindra & Mahindra among its customers.

Sachin Lawande is global CEO of Michigan-based auto-component maker Visteon, a Fortune 500 company. A tier-one supplier to the automotive industry, Visteon makes and designs engineered products that are shipped directly to car manufacturers. The company, originally a part of Ford Motor Co., now makes next-generation components, and is one of the reasons why Indian-made cars such as those by Tata Motors and Mahindra & Mahindra are ramping up on quality and becoming more international in look and feel.

Lawande spoke to Moneycontrol about their growth plans for India, the way cockpit electronics are evolving and how voice-activated technology will drive cars in a few years. Edited Excerpts:

Where do you see India in the mobility transformation phase?

My last visit to India was eye-opening and it sounds funny because I am from India.

I thought I knew that India was going through a transformation not just of the economy, but very importantly the mindset - especially of the younger generation.

The traditional way of thinking of how to go about buying a car is your starter car is the cheapest car you can buy, and then you slowly move up. Those older assumptions are moving aside, and I was really encouraged to see high-value vehicles, high-content vehicles, not necessarily low-priced,  like the Mahindra XUV 700 as an example, are doing very well in the market. The younger Indian consumer is expecting the same capabilities in vehicles you find anywhere else in the globe, which is a shift in the marketplace.

How big is India as a market for Visteon?

It is presently about $200 million of our revenues. I believe India's automotive growth is going to be one of the fastest in the entire world in terms of the growth rate. So, my expectation is India can contribute as much as 15 percent to Visteon's revenues which right now is around $2.8 billion.

What is driving transformation is that India produces about 3 million vehicles a year, and it's probably going to double in scale. We are not just in passenger vehicles, we are also in two-wheelers. So we believe in the combination of passenger vehicles, two-wheelers and commercial vehicles, plus the electrification business that we have.

Our ambition for India is for the revenues to cross $500 million and position it on a future path towards a billion dollars in revenue for us.

That means there is a growth plan for India as well?

We also believe India can serve as a hub of technology development. India is not just a low-cost manufacturing or low-cost technology (destination). We have 2,500 employees and that will also scale up given that we are going to double the number of technical centres we have, which is three right now.

If we look maybe three years down the road, what can we expect to get from some of your products in the cockpit that are under development?

What I can say is that you can expect in ... about five years ... a tremendous focus on improving the voice interaction with the car. The car will effectively talk to you. Today, you push buttons, knobs, and have moved to touch, but the next level of interaction will be voice.

Will the technology for voice recognition ever become accent-agnostic and therefore more efficient?

Hundred percent. This is one of the things that we have been working with them on. And Google, of course, does have a tremendous amount of data. So even in India, as you know, there are multiple languages, let alone accents. The voice interaction will be a terrific first step. The second step is using AI to enter cameras around the vehicle and inside the vehicle, you will be able to, for example, see on your phone, how your son or daughter is driving somewhere on the road, and actually interact with them and see what they see outside and be able to help them navigate. So the phone and the car will merge into one.

So, what does that mean for industry regulations with respect to telecom privacy, data and more?

The industry will have to evolve.  We are putting the technology underpinnings of it together working with Amazon.  If you look at our personal computer devices – we have the phone, the tablet, the computer, and we have the television, right?  There's nothing that you can do with a tablet that you cannot do on the phone, except that the tablet gives you a little more convenience when you have more downtime. When you go to the PC, it's more of a content-creation device. And the television is starting to fade away because it's nothing more than a display.

Now the car is an interesting device that's going to evolve along the same trajectory as the phone, tablet, and the car. So, there are certain driving-related restrictions, which means you cannot pay too much attention to the display and read it as you drive or touch all parts of the screen because the screen is going to be very large. So, the modality of interaction is going to be what's changing. But a lot of the content that you have on the phone and the tablet is going to appear on the cover to make that whole experience better and safer. And that's a big change going through the industry.

What are your major challenges in overhauling these technologies?

If you look at our last 12 months growth of a market, we are in very solid, double-digit territory in terms of growth. Whatever the market is doing, we are growing 15-plus percent on top of that, we could grow faster if we were not having supply chain challenges, which is the near-term challenge. Yes, our challenges are going to be how do we navigate all these very complex technical transformations that are going into industry successfully. So computing in the industry is the highest that the industry has ever seen.

I'll share with you one very small sort of anecdote. Mercedes is a large customer; BMW is a large customer. In fact, either company cannot make a single car without getting a product from Visteon. We just recently won a piece of business with Mercedes, for a superior colour display that costs around $800 (apiece). The industry has never contemplated putting an $800 display in the car, and display prices used to be about a fourth of that in the past. So, the average selling price is going up significantly, also on account of the transformations of technology.