Tackle Challenges, Continue Exploring To Stay On Top

By Frank Jourdan

Frank Jourdan is the Global Head of the Chassis & Safety Division and member of the Executive Board of Continental AG, and sponsor for Continental India. Since October 2009, he has been Executive Vice President of the Electronic Brake Systems (EBS) Business Unit and since September 1 of the Vehicle Dynamics (VED) Business Unit. The Suspension Systems and Chassis Electronics segments were merged into the EBS, which led to an expansion of the product portfolio in the area of vehicle dynamics and the business unit was renamed Vehicle Dynamics (VED). Since the end of September 2013 Jourdan has been responsible as President for the Chassis & Safety Division of Continental. At the same time he was appointed as a member of the Executive Board of Continental AG.

Continental has been at the forefront of innovation with technology-driven disruptions that define the future of mobility. And if we are talking about innovation we mean invention + market success. Focusing on trends such as assisted, automated and autonomous driving, electric mobility and connectivity, we are creating an ecosystem of safe, clean and intelligent mobility. This is a huge opportunity that takes the automotive industry to the next level. The future of mobility will be different from what we have known so far, and we are glad to be in the driving seat.
Perhaps there hasn’t been a time in history when technology disruption was at such a fast pace. Therein lies the opportunity, therein lies the challenge.Technology has the power to transform entire business models. So you either stay ahead of the game, or be left behind. Even during a period of lull, or a weak phase for the industry, you cannot afford to take your eyes off R&D and innovation. Automotive industry is also capital intensive. This means, even for technology upgrades, you are talking about big investments.

You will have to take risks, explore new areas, look at partnerships, collaborations, and new ways of running your business, while continuing to consistently deliver value to your stakeholders. In this age of innovations, the ones who stay on the top will be the ones who successfully tackle these challenges, and continue to explore.

Continental has been steadily growing, and if you have watched our results you would have seen that over the past year, we again demonstrated excellent performance. We are continuing to grow faster than our relevant industries and markets. This itself is a testimony to the confidence our customers have in our innovation capacity.

The challenges that exist within the industry and the ecosystem at large will of course have to be addressed, but this is always the case when you lead any disruptive innovation. Each of the trends we follow is going to be truly transformational for the automotive industry. To give an example from an area directly in my purview, automation will bring fundamental changes to some aspects of driving. For the mobility of the future, increasing automation will mean ever greater freedom to focus on activities other than driving. For example, during increasing traffic density drivers will have time for other activities in the car, something still impossible today.

Start/stop traffic and parking in tight parking spaces will no longer be fatiguing or difficult. Advanced driver assistance systems already allow the owner to hand over vehicle guidance to the vehicle in certain situations. There will be a clear progression from partially automated over high to fully automated driving. Drivers will never lose the dynamism, passion, and enjoyment of driving; at the press of a button they can turn the systems on or off as desired. We are excited about how much technology can accomplish!

Investments

Our investments are systematic and logical, and our balance sheet is strong. In fiscal 2018 we spent over Euro 6.3 billion on projects including R&D, expansion of production facilities, capacities, etc. As we mentioned in our annual press conference in March, we have taken advantage of the upturn in recent years and systematically reduced our debt. This means we will be able to easily undertake acquisitions for up to Euro 5 billion.
This fiscal year, we will lay the groundwork for our organisational realignment at Continental. This will help us continue to grow faster than our relevant markets and take full advantage of new potential for expansion in the key future areas of mobility. Our realignment will make us exceptionally flexible and agile. We have already completed the transformation of our powertrain business into an independent group of legal entities. This will provide greater entrepreneurial freedom for the business in a disruptive market environment.
If I were to cite India as an example, you will see that we have invested across all of these parameters. From 2008 until 2017, we invested close to Euro 260 million in India. In 2018, we announced an investment on a high three-digit crore rupees level in India by 2020. We broke ground for two Greenfield plants recently in Pune, one for our surface solutions business and the other for our powertrain business. We also are ramping up headcount in India, and our current plan is to reach the 10,000 mark by 2020. We have been significantly investing in R&D as well. Our in-house R&D centre, Technical Center India, has also been growing at a rapid pace.

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