Will Master ‘Digitalisation Of Automotive Lighting’ To Serve EVs In India: Osram India
Osram India, a wholly owned subsidiary of Osram GmbH, was established in the year 1994. The company offers products for Electronic Control Gear, Automotive Lighting, Display Optics and Light Emitting Diodes (LEDs). While interacting with BW Businessworld exclusively, Matt Hillenbrand, Business Field Head-Traditional Lighting, Osram GmbH and Avinder Singh, Managing Director, Osram India maintained that the company is confident of mastering the digitalisation of automotive lighting in order to cater to electric vehicles in India.
How important is the Indian market for Osram globally and how big are you betting on it?
Matt Hillenbrand: India is no doubt a focus country for us. As I mentioned earlier (during the press conference), it is the number two market for us in Asia after China as far as the (total) size is concerned. This is a market which we cannot ignore from a business perspective. The growth is there for sure. From a resource standpoint, as far as establishing key account managers for automotive customers (OEMs) and also developing a strong aftermarket sales team, we are certainly satisfied in the growth and the penetration we have made here. We expect to outgrow the market and gain our marketshare in the coming years. We would like to establish our position before the market really takes off.
How much have you invested in the country so far?
Avinder Singh: Unlike our competitors who have been here for many years, we started from scratch in the year 1994. We started in an era when professional lighting came into the picture. We had two plants of a very decent size and of German standards. We were manufacturing incandescent bulbs, compact fluorescent lamps (CFL), automotive traditional lamps in the country. Globally, we had carved out the traditional lighting and lamps business to a new company (LEDVANCE) and have (eventually) sold it off to an investor-led Chinese consortium for around €500 million. That particular business accounted for 35-40% of our total business in India and elsewhere. (After demerger) We now have a single plant that is located at Chennai which is making automotive traditional lighting lamps apart from technology and sustainable and customised and connected lights and professional lighting. As a parent company, Osram in Munich would always expect from any country for sure from India. The minimum expectations we have is we outgrow the market and we are profitable.
Can you provide us a breakup of your total business? Also within the automotive segment, which specific vertical gives you the maximum chunk of your business?
AS: Out of the total India business, around 45% is (into) Speciality Lighting. Within that space, the automotive segment is 70% and the balance 25-30% is entertainment and professional industrial applications. The 55% (out of our total business) would be into Opto Semi Conductors like LED Chips, luminaires, digital systems, modules and light management systems and light management systems and ballasts. Within the automotive space, 70% is from the OE and 30% from the aftermarket vertical. You name any big OEM and we are working with them both as tier-1 and tier 2 suppliers. We are also supplying to Maruti, Mahindra, Renault in the domestic market. At a global level, we are working with VW, Audi, BMW,
As you have already established your presence in the domestic market, will you now widen your export base?
AS: We are participating in the Make-in-India campaign in a big way. Firstly, you can take note of the fact that roughly 55% of our revenues are derived from India-made products. We started with 100% imports which have come down to 45% now. We are also participating in the energy efficiency programmes of the government and are working closely with EESL on street lighting projects, luminaires. So we are a part of this manufacturing renaissance which is happening in India at the moment either directly and indirectly. Although we are not exporting in large quantities from India, we are sending some products to some of the OEMs to our parent company in Germany and also to France. Our stage lighting products are made, developed, and sold in India. But the response is so good (outside India) that there is a lot of demand for exports. We might start exporting into the Asian countries and then probably later. This is just the beginning.
What kind of activities is carried out at your Indian R&D centre?
AS:We have a decently sized R&D centre in India and it is into both development and application engineering of lights. But they are only for general lighting space.
What is your current topline and would like to share your long term projections?
AS: Globally, we are a 3.1 billion Euro- firm and are earning 75 million Euros from India. These are the numbers of 2016. For 2017, we are running a quiet period. Our results will be out soon and then you will come to know our current performance. I won’t be surprised if one fine day we earn1 billion euros from India.
As the India is talking about an all-electric vehicle fleet, how are you realigning your strategies?
AS: Osram technology is adaptive (to EV powerplants). Secondly, we clearly understand that EVs will come into India and that is going to be the future. Having said that, it will entail a lot of ‘LEDification’ because fir EVs the consumption and energy efficiency should be such that from light sources that it consumes less of a battery. That is very logical and we are prepared for it. Today, ‘LEDification’ is less than 5-7% in the Indian market. But as the market (for EVs) grows, it will account for 30% and 50% of the total market by 2020 and 2030 respectively. We are fully geared for that and our parent company and the potentials that we have in the Asia Pacific market and globally should help us to address this market. As a company, we have the technology, resources, and also the intent to take on any such challenges which are going to happen in the market and look them as opportunities that the throw open to us tomorrow. We have successfully mastered the LEDification and are very hopeful that we will master the ‘Digitalisation of the Automotive Lighting’ in India.