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October 14, 2013

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Home » Business » Autotalk Special

Push for greater auto safety plays to Delphi strengths

By Lu Nengneng | October 14, 2013, Monday | Print Edition

Editor’s note:

Despite, or because of, the slowdown of China’s automotive market, foreign auto-parts suppliers are stepping up research and development here amid plans to expand operations. Be it a big group like Delphi, or a specialist like MANN+HUMMEL, they can always count on their leading-edge technologies to survive and thrive during tough times.

Rodney O’Neal, chief executive officer of US-based Delphi, led a group of senior company executives on a visit to China last month for the most concentrated investor show Delphi has ever hosted here. Delphi has increased sales in China 29 percent a year over the past seven years, staying 10 percentage points ahead of the country’s auto market expansion. The Troy, Michigan-based company has vowed to keep an at least 10 percent growth pace and to double its China revenue by 2016 from US$1.9 billion in 2012, and double it again by 2020.

Delphi launched three new plants in China this year and will open another six over the next three years as part of a region-wide plan to seize growth opportunities in the Asia-Pacific, which accounted for 18 percent of global revenue last year. The company aims to raise that proportion to 30 percent in the near future.

The regional share was a mere 4 percent when Delphi first announced this growth objective in 2005, the year it filed for bankruptcy protection. After a slash-and-burn restructuring overseen by O’Neal, the company emerged with what it said is more geographical balance and a clearer technical focus — greener, safer and more connected.

“Our growth in China is just part of the natural evolution of vehicles there,” O’Neal said. “Consumers don’t simply just want a basic car. They want a car with more content.” 

Confident that China’s car sales, powered by the rise of the middle class, are on track to hit the milestone of 20 million units this year and surpass 30 million in 2017, he predicted at least 15 percent of the growth will come in highly sophisticated vehicles, where Delphi’s technological strength comes into play.

One of its biggest stages is undoubtedly China’s increasing demand for active safety products. From adaptive cruise control and forward collision warning to lane departure warning and active night vision, all these Delphi technologies were incorporated into the recently launched domestic luxury sedan Red Flag H7, with a data analysis model fine-tuned to China’s road conditions.

At the Frankfurt Motor Show last month, the company displayed the industry’s first integrated radar and camera system, RACam, which has radar sensing, vision sensing and data fusion all combined into one module. It will be incorporated into Volvo, the Swedish premium brand renowned for safety and now owned by China’s Geely.

In the next 5 to 10 years, driver-assisted technologies will the key value of the current trend toward more autonomous driving, O’Neal said. The ultimate goal may seem quite elusive at this stage, with a lot of problems yet to solve, he added, but the market trend does raise the bar for the whole auto-parts industry because car manufacturers are now looking for system suppliers, not just component providers.

In the scramble to be a leader of the pack, Delphi is not just facing its traditional rivals. Google’s self-driving car project has chalked up a remarkable safe driving record of hundreds of thousands of miles and stands on the threshold of becoming a way of life for Californian motorists in 2017. 

Nature of vehicle

Asked about what it feels like to be competing with an IT company innovating at a dazzling speed, O’Neal said Delphi isn’t worried.

Speaking of the multiyear development cycles that are standard in the auto industry and are sometimes slowed by the introduction of fast-changing information technologies, O’Neal said,

“I don’t think it is slow. It is just the nature of the vehicle.”

There is no another collective piece of technology on the planet quite like cars, he said. They have so many computers on board and are expected to function in all kinds of harsh environments. A person can’t leave his phone sitting all day in the sun and expect it to work normally afterwards, he said.

In introducing new technologies, it is more important to keep them fresh once they are on the market than it is to rush them to market, he said. 

“The best way is to allow you to bring your own devices into the car, seamlessly connect them and make sure they work safely,” O’Neal said.

By the end of this year, China will have an estimated 500 million smartphone users. The phones are the center of most people’s digital lives and are increasingly becoming a source of driver distraction. The right in-vehicle connected solutions should be able to tailor communications and entertainment features for motorists based on their driving environment, said O’Neal. That is a function of Delphi’s MyFi system, which performs using voice recognition, text-to-speech, touch screens and reconfigurable display, and which understands the various Chinese dialects and handwritten characters.

But connected services should be more than just bringing existing smartphone functions into the car. An app developer itself, Delphi is pushing for deeper data integration with vehicles through its latest cloud-based telematics solution Delphi Connect, which provides vehicle tracking, health alerts and safe driving monitoring via smartphones. 

Delphi Connect will come to China this year. There is a reason to believe that car-related apps, instead of infotainment ones, may become the focus of Delphi’s future connected services for smartphone users.

After all, they are meant for the car.

“Its purpose to transport you safely, rather than be your TV set or living room,” said O’Neal.

 

Autotalk Special


 

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