Vol. 27, No. 3 u hansenreport.com u April 2014 JASPAR Big Data Benefits for Carmakers in the Distant Future Update At $18.6 billion the global IT market Amidst plenty of hype from the IT com- for big data is already huge and growing panies and others about the value of big Since its founding a decade ago, JAS- fast, rising annually by 28.1% from 2013 data, the market research firm SBD recent- PAR, the Japan Automotive Software Plat- through 2017, according to the Wikibon ly published a report, Automotive Big Data, form and Architecture consortium, has Project. Thus far, some of the biggest bene- What’s It Really Worth?, and came up with enlisted 136 member companies. In addi- ficiaries of the big data market are the some numbers that it thinks are realistic: tion to the five board members, the ranks mega-IT vendors such as IBM, HP, Dell, $130 total value per car, per year, based on include 75 regular members and 56 associ- SAP, Oracle and Cisco Systems, companies 15 use cases. ate members. JASPAR was founded to en- that provide the services and produce the “We are seeing some fairly wild claims able the Japanese companies to speak with hardware and software used to wrest value about the value of automotive big data; the a collective voice at the international stan- from big data. One needs to look no fur- industry needed some harder facts,” said dardization bodies but many Western auto ther than Google to see the vast potential Lee Colman, one of the study’s authors. electronics suppliers are also part of the to create enormous wealth from great The study’s top three use cases ranked in consortium. quantities of data, but while carmakers are order of value are: usage-based insurance, Yoshimichi Kudo, from Toyota Tsusho definitely interested and are actively explor- customer relationship management and Electronics, one of the five board level ing how best to proceed, they are not yet lower warranty expenses. member companies, recently brought us up big customers. Kevin Link, senior vice president of to date on the work JASPAR is focused on Wikibon defines big data as “those data Verizon Telematics, agrees that diagnostics today. Of a total of six working groups, sets whose size, type and speed-of-creation and warranty management will be among three are most active. The Next Generation make them impractical to process and ana- the leading big data use cases. “OEMs can High-Speed Network working group de- lyze with traditional database technologies use that data to drive costs down dramati- votes the most man hours to its projects, and related tools in a cost- or time-effective cally by being proactive, fixing problems roughly 380 man hours per month in meet- way.” before they become major issues. … Veri- ings alone, plus the work performed at the Carmakers have access to and could col- zon is making big investments in big data. members’ work places. lect vast quantities of data from which in- We have a team in Palo Alto with about 50 “Regarding Ethernet as a common tech- sights could be drawn, services rendered, people, and we are hiring people left and nology for in-vehicle networks of the fu- and value created. But what are the best right.” ture, the working group is compiling the use cases for automotive big data? What Still, many sizeable obstacles stand in requirements and is going to propose them value does each use case deliver and at the way of big payoffs from big data. For to the related international standards bod- what cost? best results, cars should be connected to a ies such as the IEEE,” Mr. Kudo wrote in 4G cellular network by means of an em- an email. The JASPAR working group and Automotive Big Data Use Cases bedded modem so data can flow freely to the AVnu Alliance have been working col- and from the vehicle. By 2018, according laboratively under an agreement an- u Usage-based insurance to SBD, 70% of cars sold in Western Eu- nounced in May 2013. Work with AVnu u Cloud-based maps for self-driving vehicles rope will have embedded connectivity, and USCAR has initially been focused on u Recognize customer/market trends largely due to the eCall mandate. In the camera and infotainment networks but the u Improved product planning U.S. 40% of new cars will be connected by intent is to eventually standardize a control u Text analysis of online forums 2018. system network as well. u Remote diagnostics and prognostics Even by 2018, however, much of that JASPAR’s Functional Safety working u Faster fixes of quality and safety connectivity won’t be 4G. According to group has mostly completed its work in problems IHS Automotive, of the 45 million new creating development tools and documen- u Over the air software updates vehicles worldwide that will come tation to assist carmakers and suppliers in u Driver HMI usage pattern analysis equipped with embedded telematics in complying with the requirements of ISO u Location/usage-based ad targeting 2018, just 31% of them will have LTE or 26262. The working group released the u Customer relationship management 4G connectivity. Even a 4G data pipe will English language version of its functional u Crowd-sourced traffic information have its limits: “At the end of the day, u safety templates and guides recently, in Crowd-sourced safety warnings someone has to pay the phone bill for the u February 2014. Parking directions/reservations data,” pointed out Tim Nixon, chief tech- Turn to JASPAR, page 8 Turn to Big Data, page 2 The Hansen Report on Automotive Electronics, www.hansenreport.com Page 1, April 2014 Big Data… Continued from page 1 nology officer for GM Global Connected created software that lets its customers use pose. “Customers will probably agree to Consumer. “Anyone thinking they are go- flexible resources in the cloud to store and let OEMs collect information, provided ing to get megabytes of data should be process vast sets of data. One of Pivotal’s they get something out of it,” suggested aware that transmission costs start to add customers is collecting and analyzing data Raj Paul, who manages the M2M solu- up pretty quickly.” from a fleet of 500 vehicles almost in real tions team at CW Professional Services. In a study of LTE network speeds in the time. “You have the car data and GPS data, “And anyway, people complain about United States published in June 2013 by so you know where the car is,” said Mr. Google collecting all kinds of data, but PC Magazine, AT&T’s LTE network had Natusch. “And then you bring in all sorts they still use their Android devices.” the fastest pipe, averaging download speeds of external data such as weather, and you of 16.65 Mbps and upload speeds of 7.43 can build a picture that is holistic. You can OnStar Mbps. learn how real people use cars in the real A necessary first step into big vehicle “People are suggesting that 4G is the world.” data is 3G or preferably 4G connectivity. answer,” said Andreas Mai, director of Changing the vehicle’s architecture to Founded 18 years ago, now with more Smart Connected Vehicles for Cisco Sys- accommodate big data won’t be easy. than 6.6 million active subscribers world- tems. “Not so. The speeds are faster, yes, “We’ve got to find a way to aggregate and wide, GM OnStar has more connected but they are not fast enough to support all process the information that needs to be vehicles on the road than any other car- of the big data use cases.” sent without breaking the bank,” said GM’s maker, by far. This year GM will begin Data could be sent via Wi-Fi when the Mr. Nixon. “Given the tight competitive the transition from 2G to 4G, well ahead vehicle has access to a hot spot at home or space we are in, we are not going to add of other carmakers. GM is also farthest elsewhere, “But people tend to forget that tens of dollars to a car to do this. That along in its adoption of one of big data’s the 3G or 4G or Wi-Fi link is only the last won’t be tolerated by anyone.” best use cases, vehicle diagnostics. On- mile,” cautioned Mr. Mai. “Carmakers will Star collects about 13 kilobytes of data also need to improve and scale up their Privacy per month from each connected vehicle back-end infrastructure. Rather than pump- Another challenge to consider is pri- for its diagnostics emails. While the ing the data all the way up to the cloud and vacy, which has become a hot-button issue amount of data sent today is very small processing it there, we offer products that in the wake of Edward Snowden’s revela- and therefore doesn’t require the use of put some computing at the edge of the cel- tions about U.S. spying. In its push for data warehouses and big data analytics, it lular network to filter relevant data from progress on data protection reforms, the does suggest that GM is very well posi- irrelevant.” European Union reported that nine out of tioned to eventually wring value from big 10 Europeans say they are concerned about data products and services. “We are in Car’s Onboard Systems Must Change mobile apps collecting their data without Continued on page 8 Once carmakers decide which use cases their consent. Seven out of 10 are con- to pursue and which data need to be sent cerned about how companies might use the to the cloud, they can begin to explore how information they collect. the vehicle’s architecture needs to be Carmakers will have to take a hard look © 2014 Paul Hansen Associates, 150 changed to accommodate collecting, stor- at the privacy concerns and consider how Pinehurst Road, Portsmouth, NH 03801 ing and sending that data. More onboard to accommodate them. They will be well USA. Telephone: 603-431-5859; fax: 603- memory will be needed, especially for cars served by making it clear to customers what 431-5791; email: [email protected]. without embedded modems that must rely data they are collecting and for what pur- All rights reserved. on a brought-in smartphone or Wi-Fi Materials may not be reproduced in hotspot. Automotive Big Data Sources/Pools any form without written permission. Michael Natusch heads the data science The Hansen Report on Automotive Electronics is published ten times a year at team at Pivotal Software, a Palo Alto-based Vehicle sensors software and data services start up. In his www.hansenreport.com. July/August and Diagnostic data December/January are combined issues. view, more computing power will need to Vehicle network communications Back issues are available for $50 each. Sin- reside on the vehicle. “Regardless of 4G’s Driver HMI usage/feature tracking gle and multi-user electronic subscription bandwidth limitation, it’s financially pro- Customers’ mobile devices information and a searchable index are hibitive to send back more information Social media available at www.hansenreport.com. Paul than you absolutely need. There has to be Warranty claims data Hansen Associates is a strategy and market intelligence in the car that decides what Online customer forums research firm consulting to the electronics data to store onboard, what can be discard- Carmakers’ quality databases industry. ed and what needs to be sent back,” he Call center databases Publisher/Editor Paul Hansen said. Vehicle research data Managing Editor Brianne Wolfe Rather than investing in huge data cen- Manufacturing data Director of Marketing Michelle Long ters with lots of dedicated memory, Pivotal Parking space availability ISSN 1046-1105

Page 2, April 2014 The Hansen Report on Automotive Electronics, www.hansenreport.com Mini Profile: Lochbridge

Thumbnail Sketch Professional Services* Revenue by Year ($ millions) bandwidth has continually evolved, but the Lochbridge was formerly the Professional capability to leverage the bandwidth didn’t Services division of Compuware and held 2010 to 2013 CAGR: -2.9% exist until iPhones came along. The iPhone the interim name CW Professional Services revolutionized the smartphone industry. from February to June 2014. 151.5 Now carmakers want to make their con- 142.8 134.7 Headquarters: Detroit, Michigan; nected infotainment system as revolution- www.lochbridge.com ary as the iPhone. They want a head unit 2013 Revenue: $135 million that can run multiple applications. They Products: Information technology services want a 4G Wi-Fi hot spot. They want a us- for mainframe, distributed and mobile envi- er interface that’s so rich that drivers won’t ronments 2011 2012 2013 want to use their smartphones while driv- Key Markets Served: Transportation, food ing. The head unit is right in front of the and manufacturing *As a division of Compuware Corp. before the acquisi- tion by Marlin Equity Partners driver’s face; it should be leveraged to re- Automotive Expertise: Its telematics solu- tain customers and differentiate the car- tions have connected more than 20 million maker’s brand. The 4G pipe could provide vehicles Although Lochbridge does not disclose Automotive Customers: The business is its customers, OnStar’s chief technical offi- the OEMs new revenue-generating oppor- presently working with two of the Detroit cer, Tim Nixon, was more forthcoming: tunities as well.” Three and four non-domestic OEMs on “We have used Lochbridge, and they offer Vijitha Chekuri, program director re- connected vehicle and telematics pro- what I would call a unique set of talent, sponsible for delivery and operations, grams. different from traditional automotive tal- M2M solutions, sees demand for 4G servic- Automotive Employees: More than 350 ent. … What I see with a company like that es on the consumer side as well: “Car cus- Specialties: Enterprise mobility, enabling is a way to go get access to that talent in tomers look at the Internet availability in the Internet of Things, business analytics this new world order. They are software the car and then look at their mobile and the connected car people; they are thinking about the con- phones and ask, ‘why can’t the car do what Ownership: The Compuware division was nected world but coming from a different my phone does?’ It’s not a totally fair com- recently purchased by Marlin Equity Part- angle. They come from a company that is parison, because you can’t cram too many ners, an investment firm. generally IT based, but they are not just features and functions into the vehicle traditional IT. They blend themselves into without distracting the driver. But they Background the world of apps, and because they are want the same experience, a seamless expe- The Professional Services segment of here in Detroit they have an automotive rience.” Compuware Corporation, with $135 mil- slant to what they do. I think they have lion in revenue in 2013, along with two some unique opportunity ahead of them.” Lochbridge’s Future other Compuware software divisions Approximately 350 Lochbridge employ- According to an interview with David Changepoint ($40 million in 2013 reve- ees are devoted to telematics and infotain- McGovern, managing partner of Marlin nues) and Uniface ($46 million), was sold ment, mainly developers and architects Equity Partners, published in January 2013 to Marlin Equity Partners on January 31, doing applications and IT back office devel- by Argyle Executive Forum, his investment 2014, for $160 million, less a $23 million opment. Largely a J2EE (Java 2 Platform firm looks for businesses it can grow and allowance for liabilities. The name Loch- Enterprise Edition) technology shop, it also improve through operations. “Ultimately bridge was announced in June 2014. writes Java Script and HTML software. our job is to drive returns for our investors, Working behind the scenes, Lochbridge Roughly 25% of Lochbridge employees are so we focus on businesses across a number is not a well-recognized brand in telematics devoted to the automotive market. of industries where we see opportunities to circles, despite its 15 years of experience Fees for development services are paid create value.” supporting telematics service providers with according to fixed-price contracts, or the According to the interview, Marlin Eq- machine-to-machine expertise, architecture company is paid an hourly or daily rate for uity Partners is not a leveraged buyout firm. development and systems integration work. its professional services. “We are generally low users of leverage. We It is not permitted to give the names of its want to give businesses a chance to succeed connected-vehicle customers, which in- What’s Next for Telematics? without being tied down with significant clude two of the Detroit Three, a few non- “Leveraging the 4G pipe,” said Raj Paul, cash flow drains at the outset. It’s all about domestic carmakers and several tier-one director of sales and delivery, M2M solu- making sure the business has enough free suppliers. The company’s headquarters are tions for Lochbridge. Mr. Paul, who has cash flow to get stabilized after the extrac- u located one block away from GM’s head- architected telematics and infotainment tion has been completed.” quarters in Detroit. systems for carmakers, said, “Wireless

The Hansen Report on Automotive Electronics, www.hansenreport.com Page 3, April 2014 The Company Profile… Desay SV Automotive

Thumbnail Sketch Desay SV Automotive Sales Sales by Product in millions of RMB ($US millions) Headquarters: 103, Hechang 5th Road CAGR of Total Sales: 14.2% Total 2013 Sales: 2,060 million RMB West, Zhongkai National Hi-tech Industrial ($331 million) Development Zone, Huizhou, Guangdong, 2,060 1,836 Other*,10% P.R. China 1,642 (331) (295) 2013 Sales: 2,060 million RMB 1,382 (264) Climate ($331 million) (222) control, R&D: 8.5% of sales 15% Major Products: Radios, navigation, clusters, HVAC controls Long Term Debt: Zero Infotainment, 75% Employees: 2,181, of whom 750 are engi- neers 2010 2011 2012 2013 *Includes clusters, body control modules Sales per Employee: 944,521 RMB Domestic International and PCB assemblies ($151,609) 2010 1,225 (197) 157 (25) Ownership: Huizhou Desay Industry 2011 1,331 (214) 311 (50) Sales by Market Development Co., Ltd., 75%; management 2012 1,600 (257) 236 (38) team, 25%. (Fifty-one percent of 2013 1,721 (276) 339 (54) Total 2013 Sales: 2,060 million RMB Huizhou Desay Industry Development CAGR 12.9% 29.3% ($331 million) Co. is owned by the city government of Aftermarket*, Huizhou, China.) 10% Automotive took over Mannesmann VDO, forming Siemens VDO in 2001, making Background Car Audio Systems a joint venture of Many months ago I asked a top electri- Siemens VDO and Desay Corporation. cal engineer from PSA Citroën if he was The following year the joint venture was OEM, 90% aware of any Chinese companies likely to renamed Siemens VDO Automotive (Hui- emerge from China to serve the global au- zhou). Five years later, in 2007 Siemens *In China only tomotive electronics market. His recom- VDO was acquired by Continental. Desay mendation: Desay SV Automotive. The Corporation bought out Continental’s zhou Industrial Development Corporation. company’s main products are automotive 70% share of the joint venture in 2010, During his tenure as plant manager from displays, radios, navigation and climate creating the division of Desay we are profil- 1998 to 2004 sales grew from 200 million controls, which today it supplies primarily ing, Desay SV Automotive. The “SV” in RMB to 1 billion RMB. Mr. Tan left the to Chinese OEMs and the aftermarket. But the name ties the company to its German joint venture in 2005 for a stint at Siemens Desay wants the global auto industry to roots via Siemens VDO. VDO’s Asia Pacific headquarters in Shang- know that it is not a typical low-cost, no- In this complicated ownership structure, hai, where he was COO for China. Mr. technology, low-quality, Chinese company. roughly half of the parent, Desay Industry Tan rejoined what is now Desay SV Auto- According to CEO CL Tan, “We are differ- Development Co., Ltd., is owned by the motive in 2008. ent. We are committed to R&D and tech- city government of Huizhou, China. Ac- Azmoon Ahmad is managing director of nology, and we want to be a global player.” cording to management, there is little inter- Desay SV Automotive in Singapore, where The company was founded in 1986 as ference from the state in the company’s he directs international business develop- Car Audio Electronics Co., a joint venture day-to-day operations. ment. Born in Malaysia and raised and ed- between Philips Car Systems, HK Gold CL (Choon Lim) Tan is chairman and ucated in Singapore, Mr. Ahmad is an Peak Industries (Hong Kong) and Huizhou CEO of Desay SV Automotive. Born in electronics engineer who has been design- Industrial Development Corporation, Malaysia, Mr. Tan was educated in Canada ing radios and automotive electronics since which changed its name to Desay Corpora- and started his career in 1984, working as 1986, first for Philips Car Systems and later tion in 1992. In 1998, Phillips Car Systems an engineer for Philips in Singapore. After for the progression of acquirers of that was acquired by Mannesmann VDO, at the jobs in production and purchasing, in business, ending with Continental. Mr. time a German tier-one supplier of cockpit 1998 Mr. Tan became plant manager of Ahmad spent several years working in modules, instrument clusters and control the manufacturing plant he presently runs Europe before returning to Singapore to systems. In 1999, Mannesmann VDO in Huizhou. In 1998 the plant was owned run his own small R&D company. He was bought out Gold Peak’s shares in the Car by the original three-party joint venture of persuaded to join Desay SV Automotive in Audio Systems joint venture. Siemens Philips Car Systems, Gold Peak and Hui- 2012 by his friend of 28 years, CL Tan,

Page 4, April 2014 The Hansen Report on Automotive Electronics, www.hansenreport.com Desay SV Automotive

Sales by Country* Division Locations Desay SV Automotive Competition Total 2013 Sales: 2,060 million RMB Huizhou, Guangdong, China: Radio/Navigation ($331 million) Desay SV Automotive Alpine Huizhou Desay SV Automotive Display Brazil, 4% Other, 2% Delphi Desay SV Automotive Singapore Russia, 6% Foryou General Electronics Desay SV Automotive Europe, Hangsheng Electronics Japan, 7% Mainaschaff, Germany Harman Desay SV Automotive Japan, Panasonic Hiroshima, Japan Visteon Climate Control Panel China, 81% Low Manufacturing and Engineering Behr Hella Preh *International sales percentages are a rough Costs breakdown by country. The company’s manufacturing workers, all of whom are in China, take home about Growing Sales Outside of China Employees by Country $500 per month, based on a 60-hour work In 2013, 19% of sales came from orders week, which is typical. The city sets the offi- received from companies operating outside China 2,160 cial minimum wage. In addition, the em- of China. In five years, Mr. Tan would like Singapore 14 ployer’s cost includes about $200 in to grow the international business to 30% Germany 5 benefits, for social security payments, medi- of the total, with China accounting for Japan 4 cal insurance and nearly free food and 70%. After that, he expects to maintain the lodging. Workers are paid one-and-a-half 30%-to-70% ratio. “Both businesses will times their regular pay for any overtime grow,” said Mr. Tan. who asked Mr. Ahmad to help him develop over 40 hours; for Sundays they are paid u Japan the company’s business outside China. Mr. twice their regular pay; working on public After China, Desay SV Automotive does Ahmad, who splits his time between China holidays brings the pay to three times the the most business with Japanese compa- and Singapore, is also general manager of regular hourly rate. nies. Approximately 7% of 2013 shipments Desay SV Automotive’s Radio Navigation New engineers fresh out of college with went to Japanese companies. In 2013, De- business unit, which features a product line bachelor’s degrees earn about $700 per say SV Automotive created a subsidiary in developed especially for the international month, including overtime. Engineers with Hiroshima-city to serve Mazda and other market. five years of experience are paid from customers. Since 2012, Desay SV Automo- Mr. Tan describes his management style $1,200 to $1,800 per month, including tive has supplied Mazda with radios, dis- as easy going. “We’re not too concerned overtime. plays, CD players and USB hubs for with hierarchy; we are pretty relaxed by “Desay SV Automotive has been profit- vehicles manufactured in China by Mazda Chinese standards,” said the CEO, who able every year since the year the joint ven- and Mazda’s joint ventures. The company answers to CL or to Mr. Tan around his ture was founded in 1986, except for the hopes to also win Mazda’s next generation company. “I don’t show that stern face that first year when it broke even,” said Mr. navigation platform for the Chinese mar- you often see from Chinese company man- Tan. I asked him which financial numbers ket. In 2013 Mazda sold 184,257 Chinese- agement.” he watches most closely as he manages his made vehicles in China. Johann Löttner, formerly the chief fi- company. “I watch the trend of manufac- Beginning in April 2014, Desay SV nancial officer of Mannesmann VDO and turing costs, the bill of materials and R&D Automotive will begin production of navi- Siemens VDO, serves Desay SV Automo- costs. I also watch inventory. If you are not gation systems for a new vehicle launch in tive as an advisor to the board from his of- careful, that can kill your company. I also China. Desay SV Automotive’s role is to fice in Germany. watch accounts receivable, and of course load an outsourced navigation engine into One thing that sets Desay SV Automo- cash flow.” Desay SV Automotive has no its head unit and then to integrate the navi- tive apart from many of its Chinese com- long-term debt. gation silver box with the display and con- petitors, according to its management Constantly on the lookout for a possible trols. Navigation engines are typically team, is its German roots. “Our factory was acquisition, the company is interested in purchased as a commodity product in set up by Siemens; it looks and operates technology that will lead to a winning prod- China, much like CD players are. like a German factory,” said Mr. Ahmad. uct. They have so far come up empty. “Un- In early 2013, Desay SV Automotive “The processes for project and product de- like some Chinese companies that buy began shipping DVD players for Japanese velopment are actually Siemens’ processes. companies without looking at why, we are vehicles assembled in Indonesia. Next year In effect, we provide our customers with very, very careful,” said Mr. Tan. it plans to localize production of the DVD German engineering, but in China at Chi- units with an Indonesian manufacturer. nese costs.” Continued on following page The Hansen Report on Automotive Electronics, www.hansenreport.com Page 5, April 2014 Desay SV Automotive

by Caterpillar, hopes to win more interior Automotive R&D Expenditures by Year Customers electronics orders from Caterpillar. In millions of RMB ($US millions) u Southeast Asia and Elsewhere Ranked by Sales–2013 #1 FAW-VW Automobile 160 180 Rather than competing head-to-head 142 #2 Shanghai General Motors (26) (29) with major suppliers such as Bosch and 120 (23) Continental, Desay SV Automotive has #3 Geely Holding Group (19) #4 Fujitsu Ten adopted a strategy that supports the wish of #5 Mazda Motor Corporation many countries to provide their citizens #6 SAIC-GM-Wuling Automobile with locally manufactured content. It has #7 Haima Motor Corporation successfully built up production lines for #8 Dongfeng Peugeot Citroen Automobile customers in South America and the Mid- 2010 2011 2012 2013 #9 Chery Automobile dle East to support localization efforts and #10 Brilliance China Automotive Holdings 2010 to 2013 CAGR: 14.5% thereby reduce relevant duties and taxes. Desay SV Automotive has been working Others, Alphabetically That localization initiative will also support with a large automotive OEM parts suppli- Global Passenger Car OEMs: new radio business with other Japanese er in the Middle East. Because it is a small Chang’an PSA OEMs manufacturing in Indonesia for the company, localization appears to be a via- Dongfeng Peugeot Citroen Indonesian market. ble business model for Desay SV Automo- Hyundai In a few years’ time, as the business it tive. It eliminates the need for large Mazda has with Mazda and other Japanese custom- investments in manufacturing resources, Shanghai GM ers grows, Desay SV Automotive expects its and it provides access to more non-Chinese Shanghai VW share of sales to Japanese OEMs and tier customers. Chinese Passenger Car OEMs: ones will nearly double. Leveraging its localization experience in BAIC JAC u Germany Indonesia, Malaysia, South America and Chana JMC In mid-2014 Desay SV Automotive will the Middle East, the next step will be to Changfeng Lifan Auto begin shipping basic double-tuner radios to apply the same business model in India, DFLZ SAIC Skoda, its first major contract in Germany. Russia and Eastern Europe, eventually for DFM Soueast “We were really proud to learn a couple of all the major product lines: radios, naviga- FAW TJ FAW weeks ago that Skoda’s test of our radios tion, clusters and HVAC control units. GAC Group ZX Auto went very well,” said Johann Löttner. Desay “We do all of the engineering in Great Wall is also producing some clock units for China,” said Mr. Ahmad. “We have agree- Skoda for the rear seat. ments with our local partners that Desay Commercial Vehicle & Construction: Yet more good news for Desay SV Auto- SV Automotive reserves the right to dictate Caterpillar Naveco motive’s German prospects: The company how the product will be produced to the CAMC SAIC-Iveco won an order from a high-end carmaker to level of quality that is expected. We are Doosan Sany ship a 10-inch, infrared LCD touch screen. very serious when it comes to quality.” Foton Sinotruk Production will begin in early 2015. “You Higer XCMG don’t need to actually touch the display to Alliances John Deere XGMA interact with it, you just need to break the Desay SV Automotive is very small com- Liu Gong Yutong thin layer of IR above the glass,” said Mr. pared with the companies it competes with. Maxus Löttner. “Winning business like this with a It is very open to sharing its business op- premium German carmaker will give us a portunities with partners who can provide The two companies complement each good reputation to work with other Ger- technology that might be missing, or access other: “Peiker didn’t have access to the man carmakers,” he added. to markets and customers outside of China Chinese market or a factory in China; we The Desay SV Automotive Europe sub- as the company expands globally. “The do,” said Mr. Ahmad. “And they have cer- sidiary in Mainaschaff, Germany, near products are getting more and more com- tain technologies that we don’t have. One Frankfurt, was set up to serve carmakers plicated so we need to have good alliances,” good example is our cooperation on soft- and tier-one suppliers in Europe. said Mr. Tan. ware for a double tuner that will go into u u United States Peiker Acustic production soon with VW Skoda.” Desay SV Automotive designs, manufac- Located in Friedrichsdorf, Germany, Peiker will provide its double AM/FM tures and supplies Caterpillar with instru- with strong links to BMW and Mercedes, tuner for the radio project that Desay won ment clusters, radios and climate controls Peiker produces acoustics, telematics, con- with VW Skoda in the Czech Republic. for excavators. The company, having been nectivity, multimedia and radio products. One tuner is for audio reception and the given the official status of global supplier other is for the data received from the RDS

Page 6, April 2014 The Hansen Report on Automotive Electronics, www.hansenreport.com Desay SV Automotive

Products the company is considering whether or not quad-core chips would then be powerful Radio Navigation Passenger vehicle TFT Radio only Passenger vehicle reconfigurable TFT enough to run not only the radio naviga- CD radios Commercial vehicle tion system but also a bird’s-eye-view cam- 6-CD radios Construction machinery era system. Desay SV Automotive would Display radios Construction machinery monitors like to offer a bird’s-eye-view camera priced Navigation Clock module low enough to penetrate the mid-priced car Telematics Indicators segment. Climate Controls Automotive Displays Another advanced development team is 4-Zone FATC (fully automatic temperature Passive LCD control) TFT display modules working to integrate the radio navigation 2-Zone FATC Display systems unit and the climate control panel within 1-Zone FATC Aftermarket China Series the center stack. Integrated center stack VW series navigation ETC (electrical temperature control) GM series navigation Competitive Strengths MTC (manual temperature control) Rear seat entertainment system One of the things that distinguishes Rear seat controllers SiVi Breath air filtration system Black box Bird View System Desay SV Automotive from its biggest glob- Driver Information Displays WiFi digital video recorder al tier-one competitors is low R&D costs. Passenger vehicle stepper-motor clusters According to Mr. Ahmad, a head-unit de- velopment project undertaken by a Bosch (Radio Data System) subcarrier. Peiker pro- One, under the direction of Mr. Ahmad, or Continental would cost anywhere from vides both the software and the hardware. aims to serve global customers such as 5 million to as high as 20 million euro for u Rightware Volkswagen, Skoda, GM, Mazda and Nis- R&D. “I can safely say that our R&D costs Desay SV Automotive uses Rightware’s san among others. Group Number Two would be no more than 3 million euro and Kanzi UI Solution, a tool for rapid inter- serves the local Chinese carmakers, for ex- would more likely be in the range of 1.5 face design and development, for its radio ample Geely, Chery and Great Wall. million to 2 million euro,” he said. “Anoth- displays. “Rightware converts our HMI de- “The global customers require adher- er advantage that we have is speed. In signs pretty quickly into software, which ence to strict processes and have high quali- China everything goes twice as fast.” saves us time,” said Mr. Tan. “We were the ty expectations, whereas the Chinese According to Mr. Tan, his company’s first to use their software in China, and customers want inexpensive products that investment of 8.5% of sales in R&D is very now we are their sole agent in China for are developed quickly,” said Mr. Ahmad. high for a Chinese company, which more the automotive application.” Rightware’s Radio Navigation Group One’s prod- typically spends between 2% and 3% of headquarters are in Espoo, Finland. ucts are aimed at the mid-priced vehicle sales on R&D. The company employs 750 u HTC segment where it can best compete. “We R&D engineers, approximately 350 of HTC and Desay SV Automotive signed don’t serve the very lowest-price segment of whom write software. a collaboration agreement in 2012 to devel- the market because it is too small. And we Desay SV Automotive feels uniquely op SiVi LINK, which gives HTC smart- don’t serve the very highest segment be- qualified to integrate the center console. phones access to the head unit for display cause that would require a heavy invest- Unlike many competitors, it makes all the and control. Thus far, SiVi LINK has only ment in resources and technology,” said pieces: displays, radio head units, naviga- been promoted in the Chinese aftermarket Mr. Ahmad. tion units and climate control panels. and only works with some HTC phones. Reconfigurable Clusters: The company Delivering good quality at a reasonable According to Mr. Ahmad, SiVi Link’s 25- produces traditional single- or dual-dial in- cost is the company’s mission. In the first frames-per-second data rate was an im- strument clusters based on stepper motors two months of 2014, Desay’s radio naviga- provement over MirrorLink’s data transfer and has begun investing in the develop- tion products shipped with a defect rate rate at the time, making for smoother video ment of LCD-based reconfigurable clusters. near its goal of 50 PPM. Desay SV Automo- streaming from HTC handsets. Desay SV The company wants to offer reconfigurable tive believes that its quality performance is Automotive has also developed head units clusters that are inexpensive enough to superior to its major Chinese radio naviga- that link to smartphones via MirrorLink. penetrate the mid-priced car segment. In tion competitors, Hangsheng Electronics HTC is also a charter member of the Car 2014 the company will begin promoting a and Foryou General Electronics. “Our lead Connectivity Consortium supporting new reconfigurable cluster based on a 12.3- in product quality relates to our develop- MirrorLink. inch LCD panel. ment, production and supply processes,” Advanced Development: Desay SV Au- said Mr. Löttner. “We have good, close re- Product Strategy tomotive’s advanced development team is lationships to our OEMs and we are very Navigation: Desay SV Automotive working on a number of projects to devel- transparent; we don’t hide anything. Over- maintains two radio navigation business op technologies that would support ship- all, I’m convinced we are well ahead.” u units. Radio Navigation Group Number ments in the 2018 timeframe. For example

The Hansen Report on Automotive Electronics, www.hansenreport.com Page 7, April 2014 Supplier and OEM Ten-Year Growth History: 2003–2013 JASPAR… Tier-one suppliers looking to serve the fastest growing carmakers are likely calling on Hyundai-Kia and Volkswagen. Continued from page 1 The Mobile Device Interface Working Major Suppliers Sales and CAGR 2003–2013 Group is creating interface requirements plus specification and implementation 2003 Sales in 2014 USD 2013 Sales in USD CAGR % guidelines for connecting mobile devices Hyundai Mobis 5.0 billion 31.9 billion 20.4 with the vehicle. “We are working with the Continental Automotive 6.3 billion 27.4 billion 15.8 Wi-Fi Alliance and the NFC (Near Field Magneti Marelli 4.4 billion 8.2 billion 6.4 Communications) Forum studying in-vehi- Aisin Seiki (FY ends 3/03, 3/13) 13.8 billion 24.8 billion 6.0 cle use cases for both those technologies,” Autoliv 5.3 billion 8.8 billion 5.2 said Mr. Kudo. “We are also working with Hella Group (FY ends 5/03, 5/13) 4.1 billion 6.8 billion 5.2 the Car Connectivity Consortium because TRW 11.3 billion 17.4 billion 4.4 Denso (FY ends 3/03, 3/13) 22.8 billion 35.1 billion 4.4 MirrorLink is the only open standard for Yazaki Group (FY ends 6/03, 6/13) 9.4 billion 13.4 billion 3.6 smartphone connection in the car.” Valeo 12.7 billion 16.6 billion 2.7 According to Mr. Kudo, it is a common Bosch Automotive Technology 32.3 billion 42.1 billion 2.7 understanding among JASPAR members JCI (FY ends 9/03, 9/13) 17.1 billion 21.8 billion 2.5 that JASPAR’s specifications will be used Lear 15.7 billion 16.2 billion 0.3 by Japanese carmakers and suppliers in Delphi 28.1 billion 16.5 billion -5.2 their products and their development pro- u Visteon 17.7 billion 7.4 billion -8.4 cesses. Reporting currency is converted to 2014 USD. Big Data… Continued from page 1 Major Carmakers’ Unit Sales and Global Market Share 2003 and 2013 the early stages of getting into the [big data] space, exploring what is possible,” said Tim Carmakers by 2003 2003 2013 2013 CAGR of Nixon. “It has great promise, no doubt, but Region Unit Sales Market Unit Sales Market Sales this is one of those things that will take Share Share time to mature.” Asia Aha Analytics Hyundai-Kia 2,505,460 4.2% 7,559,687 9.1% 11.7% Nissan 2,968,357 5.0% 5,102,979 6.2% 5.6% Harman International is already pilot- Toyota 6,070,400 10.2% 9,980,000 12.0% 5.1% ing a big data solution called Aha Analy- Honda 2,910,000 4.9% 4,279,000 5.2% 3.9% tics, which runs on its Aha cloud platform. Suzuki-Maruti 1,673,297 2.8% 1,171,434 1.4% -3.5% Harman was using the cloud to support its Mazda 1,068,400 1.8% 1,015,939 1.2% -0.5% own infotainment system development Total Asia 17,195,914 28.8% 29,109,039 35.1% 5.4% projects by pulling data from the radio in Europe real time to troubleshoot any defects. Har- Volkswagen Group 5,015,727 8.4% 9,730,680 11.8% 6.9% man decided to expand that capability and BMW 1,104,916 1.9% 1,963,798 2.4% 5.9% make it available to carmakers who would Mercedes-Benz 1,341,638 2.3% 1,565,563 1.9% 1.6% use the service to collect and analyze data Renault 2,388,958 4.0% 2,628,208 3.2% 1.0% after sale. PSA 3,286,100 5.5% 2,818,695 3.4% -1.5% “We have taken this tool that we created Fiat1 1,989,921 3.3% 2,092,000 2.5% -3.1% for debugging and will use it from a big Total Europe 15,127,260 25.4% 20,798,944 25.1% 3.2% data standpoint to do analysis on what cus- North America tomers are actually doing,” said Rahul General Motors 8,595,000 14.4% 9,714,652 11.7% 1.2% Misra, director of connected services at Ford 6,724,000 11.3% 6,330,000 7.6% -0.6% Harman. “We’ll be able to tell carmakers Chrysler1 2,637,867 4.4% 2,238,000 1 2.7% -1.6% what radio stations customers are listening Total North America 17,956,867 30.1% 18,282,652 22.1% 0.2% to, whether the CD player is being used and what phones are brought in so they Others 9,359,568 15.7% 14,649,365 17.7% 4.6% can make sure they pair with Bluetooth.” Total Global Sales 59,639,609 100.0% 82,840,000 100.0% 3.3% Harman expects that Aha Analytics will be used beyond the infotainment system, 1 2013 figures are Hansen Report estimates—Fiat-Chrysler doesn't break out brand sales once carmakers modify their networks so Data: Carmakers, suppliers, Automotive News, IHS the radio bus has read access to the other vehicle buses. u

Page 8, April 2014 The Hansen Report on Automotive Electronics, www.hansenreport.com