40 | AutoPartsAsia | FEBRUARY 2018We upgrade the cameras four times
a year, which is our core internal
development. The other stuff we
decided not to do internally but with
partnerships. It is a question of who
has got the pieces that fit into the
puzzle.”For Magna the key question for all
these technologies is when they are
going to be really sold in the market.
It wants to get involved only when
they are commercialised. “That’s
what we have to keep in mind
because you can spend an awful
lot of money on a technology that
might be out of date by the time it is
commercialised. The problem with
software-based technologies is that
they become obsolete very quickly.
A good example is the lithium-
ion battery. People are putting in
huge capacity right now on the
current approach, but will that be
appropriate and still feasible when
the EV market really takes off? At
the Tokyo Motor show 2017, Toyota
announced that it is moving ahead
with its solid-state batteries. They
feel it will be feasible much sooner
than previously thought. So howwill that affect the whole lithium-ion
industry is a big question,” he said.Pace Of Change
As a decentralised company, Magna
operates on the basis of individual
companies. It has electronics and
powertrain together as an operating
unit as it considers that all aspects
of electrification and ADAS are
inter-related.” We are always
looking at ways to organise the
business and make it sustainable
with individual modules or product
groups. Obviously, if we are to take a
business totally devoted to ADAS, we
would lose a lot of money because
there are no sales for it. We have to
focus on something that can sustain
itself as a stand-alone business. We
are unlike our competitors because
we like to get businesses to be stand-
alone and self-sufficient as soon as
possible, but they have to have a
market before we do that. We look
at long-term business survivability,”
O’Brien said.
Magna looks at the very fast changes
and disruptions in the automotive
industry in isolation. For example,in something like ADAS, which is
changing very fast,the company
finds a lot of glitz attached to that.
Similarly, powertrain,where almost
everything changes in five years.
“There are CAFE requirements,
fuel efficiency and light-weighting
needs; every small item down
to the pump is changing very
noticeably. It’s easier to make
changes when you have software
because you don’t have to
retool anything. If you look at
the projections for EVs, by 2025
or 2028 the internal combustion
engine may become obsolete,
which means that any new
investments in IC engines have
to be looked at very seriously.
The pace of change must be
considered carefully as lead-
times in business have reduced
considerably. Even the metal
business is changing rapidly
with alternatives required for the
hybrids coming in. Everything,
including seats, is changing so you
have to look behind the glitz. The
pace of change in our business
overall has increased dramatically,”
he said.
About a possible large-scale
transition or cross-over to EVs,
when their cost of ownership will
become affordable in the near
future, O’Brien said, “The most
important question is when is the
cross-over point because once there
is an infrastructure people may
go from the IC engine to electric
mobility; there will be a flipping
point, but costs have to come down
significantly. A few years ago, our
approach would have been that we
can do everything internally - we did
not look outside. The fundamental
difference now is that we are
looking more outside because of
the pace, and cost, of change. No
single company can follow all the
paths where technology is going so
we have looked for partnerships.
In the past we would try to control
the partnership but now we are
amenable to working with multiple
people at the same time, investing
an amount in each of them so that
we can save money on a number of
different horses in the race. It would
help us strike a balance - it’s a very
big change for us. The closer we
get to a new technology, like ADAS
or anything to do with software
technologies for the new-age
vehicle, it makes us that much more
externally focused and outward-
looking.”SPECIAL REPORT