INTERVIEW: Han Hendriks, Johnson Controls Automotive Interiors
Calum MacRae interviews Han Hendriks, VP Advanced Product Development & Sales for Johnson Controls Automotive Interiors, to hear about the company's business strategy in the area of interiors.
just-auto: There has been quite a lot of change with Johnson Controls interiors in the last 18 months with the divestment to Visteon then the announcement of the joint venture with Yangfeng?
HH: I've been with JC for 15 years and it's been change constantly! With Yangfeng we announced May 19 our intent, I know this is a topic we have to be very careful talking about, it's obviously in the middle of the anti-trust stage but we hope to finalise it in the first half of 2015.
just-auto: It strikes me as quite an interesting strategy. With car interiors - cars for that matter - the expectation is for them to have ever increasing electronic content, so to have a business providing electronic content and divesting it?
HH: Well from that perspective it's a very valid way of looking at it. But if you look at it from the strategy our company has we're really looking at becoming a multi-industrial company. And that means that JC as a corporation wants to be less dependent on the automotive industry (a very big part of our business) and strengthen the other parts of our business. We looked at our different businesses and found out that if you want to be really successful with an automotive electronics business it requires significant investment. Huge investment if you look at the infotainment requirements today. It was only 3% of our business. To counter we are going to invest in other parts of our company.
We also immediately had a discussion with our interiors leadership team based on the trend that we see in the market of electrification of interiors - yes we exited the infotainment part of the business - but we also see electrification is happening for product lines such as door panels and instrument panels. We believe that "dumb" plastic surfaces will become smart. Smart could be the integration of lighting features, HMI functionality, HVAC controls, active cooling surfaces (instead of vents). While we were in the process of divesting electronics, we also made a commitment to say electrification of interiors is going to happen and we're going to lead in the electrification of interiors.
just-auto: When do you anticipate smart interiors being on the market for the consumers?
HH: We see examples entering the market as we speak. We have a set of examples in our Bespoke vehicle already (Note Bespoke is JC's interior integration concept first shown at the 2013 NAIAS) where we have decorative piano black surfaces that once you turn on the vehicle HMI functions appear, there's a surface you just put your phone on for charging, lighting features etc. At the 2015 NAIAS we're going to show a full vehicle interior concept ID (Interior Demonstrator)15.
just-auto: Can you tell me a little more about IV (Interior Vision) 25, JCI's view on three big strategic areas for 2025?
HH: For example one was Chinese influence on premium. In 2020, there is the assumption that the Chinese market for premium vehicles will be one and a half times or more than one and a half times bigger than the American and European premium market combined. At the moment we have the generation born in the 1980s, the balínghòu generation, entering a stage of their lives when they start to buy premium vehicles. We believe that today's generation in China is very much dominated by more traditional consumers who look to European premium for what they consider the standards. But the balínghòu generation 10 years from now will have more confidence and pride in their heritage and they won't just rely on copying Europeans in terms of what premium and luxury means and will develop their own view and style. Now they need the big labels and big brands to confirm they can afford luxury, but that will change as they become more self-confident. So if we understand what is happening we can be the best partner to our customers and have the solution sets to respond to the market direction of the biggest premium market in the world.
just-auto: As JC how are you answering these potentially diverse regional trends - it almost sounds like you need mass customisation to address different regional preferences?
HH: The ability to customise interiors is very important. Everything that is not visible can be common. But on interiors it is important to standardise on process technology - for plastics, for natural fibres, for surface materials, for smart surfaces. Five years ago we had five different processes to make natural fibre materials - some were regional due to base materials only being available in that region, none were global - and now we have standardised on one process and it's globally available in a very consistent quality and price to our customers.
In terms of process innovation we're very interested in what 3D printing can offer. Presently, 3D printing is useful for reducing prototyping and tooling costs. But, for something like an instrument panel, that has 23 separate components and process - the ability to print and assemble in one is very attractive. The only thing is at the moment the cycle time is too slow - but where time has been an impediment history has shown that a way is always found. Not only does 3D printing appeal from the reduction in assembly complexity, but also from the point of view of reducing material costs, by up to 25%, as wastage can be reduced.
just-auto: What is the biggest pressure from OEMs for interiors - is it lightweighting or is it cost?
HH: If you're not a best cost leader you can't play. You have to be where everyone else is or lower cost or have higher value. Our product strategies really target best cost and higher value and that what our customers and all consumers want.
just-auto: Do you have different lead times with OEMs depending on the relationship status - i.e. if you're seen as a strategic partner or just as a supplier?
HH: Development times of our customers differ - between 24 months and 36/48 months depending on the OEM. And there are customers where we target significantly large portions of business where it is very important for us to engage early, at two years before sourcing.