Automotive News Europe - July 2019 - 20

AUTOMOTIVE NEWS EUROPE

SUPPLIERS

Supplier TALK FROM THE TOP

Leveraging opportunities
Aptiv CEO sees big gains from consolidating the vehicle's 'brain'

revenue growth is about 6 percent, so
roughly 9.5 points over the market.

he 2017 split of Delphi Automotive
created two automotive suppliers
with distinct focuses. Delphi Technologies concentrates mainly on powertrains,
while Aptiv's key businesses are sensors, software, active safety and driving
assistance. Kevin Clark was named CEO
of Delphi in 2015 and retained the chief
executive title at Aptiv. He spoke to Automotive News Europe Correspondent
Peter Sigal about the challenges of staying ahead of the technology curve.
What has been the reaction from customers to the creation of Delphi Technologies and Aptiv?
Customers understood that their requirements in the powertrain area and the areas where Aptiv operates were becoming
more complex and technology-intensive,
and that having two very good businesses
that were well-capitalized would increase
the focus on each one's strengths. The
feedback has been extremely positive.
In 2018, Aptiv outperformed the industry by about 10 percentage points
in a very challenging year. What was
the key to that performance?
It starts with our product portfolio. One
of the rationales for the separation is that
it would let us leverage opportunities in
what we call the brain and nervous system of the vehicle, in both hardware and
software. We did extremely well in active
safety, with growth above 50 percent,
and in high-voltage electrification, where
we grew by roughly 60 percent. We had
bookings in electrification last year of
over $1 billion (more than 890 million
euros), and new customer awards of
$4 billion. And, we won five awards in
2018 for what we call our Automated
Driving Satellite Compute Platform.
Could you explain what a satellite architecture entails?
You move some of the software and
computing capacity out of the perception systems -- in this case, radar and
cameras, and you centralize it. That allows you to consolidate a lot of the vehicle's "brain" into a domain controller
-- it's almost like having a file server in
the vehicle. In turn, it's easier for the
automaker to package, and you can use
lower-cost radars, for example. It's also

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Meet the boss
❚ NAME: Kevin Clark
❚ TITLE: Aptiv CEO and Chairman
❚ AGE: 57
❚ MAIN CHALLENGE:

Building Aptiv's business on
recurring revenues from hightech products such as software
and computing power.

less expensive to repair in the event of
an accident.
How do you see Aptiv's two business
units, Active Safety and User Experience, and Signal and Power Solutions, evolving?
Our AS & UX business will grow roughly
10 points over [global] vehicle production
in the next several years. That is being
driven by active safety, and the unit overall will grow faster than 10 points over the
market in China. Our Signal and Power
Solutions segment will grow by four to
six points globally, also faster in China
because of the growth in high-voltage
electrification. Overall, in electrification,
we expect more than 50 percent growth,
driven by the need to meet CO2 standards in Europe and the push to put more
electric vehicles on the road in China.
What are your current forecasts?
We expect vehicle production to be down
3.5 percent globally -- down 3 percent in
North America, 4 percent in Europe and
9 percent in China. Our own outlook for

Where are you currently focusing the
company's investments?
As we look at future platforms -- those
we think will generate revenue starting
around 2025 -- autonomous driving is
one of our focus areas. We see it as an
extension of our active safety technology: the algorithms, the perception systems, sensor fusion and the computer
requirements. Our outlook for 2025 is
that we will have roughly $500 million
in revenues from Level 4 autonomous
driving. Level 3 technology, which we
consider to be advanced driver assist systems, will add another $500
million by then. The second area is in
data. Cars are creating a tremendous
amount of data. Through our acquisition
of Control-Tec a few years ago we can
efficiently collect data, but more importantly, organize and process it in a way
that helps our customers be more efficient. For example, shortening development time to save automakers money.
We are also using data in post-production to help monitor fleets and reduce
warranty costs. A third use for data will
ultimately be collecting and selling it to
non-automotive customers.
Are you looking beyond traditional automakers for new revenue sources?
We think most of our forecast for $500
million in autonomous driving revenues
in 2025 will be with non-traditional automotive companies, so from ride-sharing
companies or mobility providers, for example. Our view on autonomous driving
is you will first see it adopted by such
players, in a robotaxi environment in
geofenced urban areas.
As emission standards tighten, what
is your prediction for electrification
in Europe?
With the unfavorability of diesel, electrification is the only viable path today
[to meet tougher forthcoming CO2 standards]. At one point there was a discussion about seeing a transition from mild
hybrids to full hybrid to battery-electric
vehicles, but our view is that you will see
a much faster move toward full hybrids
and electric vehicles. ANE

JULY 2019

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Automotive News Europe - July 2019

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