Visteon has transitioned from a multi-product, Ford spin-off to a focused electronics supplier with a diverse customer base. Continuing our series of interviews with tier one component suppliers at the Consumer Electronics Show, Matthew Beecham caught up with Sachin Lawande, President and CEO, Visteon to learn more about how its digital solutions for the smart cockpit, display audio and the fast-evolving ADAS landscape.
What is the headline message that Visteon is putting out here at the 2020 CES?
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The vehicle cockpit is evolving into a fully digital environment, with multiple displays bringing information about the vehicle and its surroundings, as well as connected multimedia content. At CES, Visteon is showcasing a range of digital solutions that address this trend – all designed to improve safety and the user experience for the driver and passengers.
We’re highlighting two key modules that will be essential to the digital cockpit.
We’re highlighting two key modules that will be essential to the digital cockpit. The first is a multi-display module integrated with a glass cover lens that gives the entire system a seamless and high-quality look-and-feel. The second is an enhanced iteration of our industry-first integrated cockpit computer, SmartCore™, which runs multiple software domains such as the instrument cluster and infotainment.
To what extent are your digital clusters permeating the premium car segment into more mass-market models? And what sort of take rates are you currently seeing for digital clusters in the mass-market?
We launched the first all-digital cluster in 2011, with Jaguar Land Rover, and since then Visteon has been the global leader in this product category. In the early years following that first launch, most all-digital cluster applications were in the premium segment of the market, with a display size of 12.3 inches being the most common. Since then, the industry has adopted all-digital clusters for mass-market vehicles as well, with display sizes of 10.25 inches and even 8 inches. That has been a big factor in our recent sales growth. We now supply all-digital clusters to eight of the 10 largest vehicle manufacturers, for both premium and mass-market vehicles.
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By GlobalDataWe understand that display audio is a relatively new product line for Visteon. How is this side of your business shaping up? And does the same trend for digital clusters permeating car segments apply to digital audio?
Display audio is one of fastest-growing segments within the infotainment product line.
Display audio is one of fastest-growing segments within the infotainment product line. This has been largely driven by consumers’ desire to mirror their smartphone experience inside their vehicles. The availability of the Android operating system as the infotainment OS has opened the display audio system to third-party apps, which makes the system even more compelling to consumers. Visteon made a strategic decision to focus on display audio about two years ago, and we have started to win large programs – including our largest-ever win for a display audio product with a projected lifetime revenue of $640 million. While digital clusters are driving much of our current growth, our next growth phase will be heavily driven by display audio, due to a number of key wins in 2018. So, we are still a year or so away from display audio being a meaningful part of our revenue story, but it will be a very important business for us.
How is Visteon currently performing in Asia, specifically China? Where is the growth coming from?
After several years of continuous growth, the automotive market in China has slowed down starting in 2018, and this weak environment continued in 2019 as well. Despite the challenging current environment, China still represents the largest auto market in the world and is very important for Visteon. We continue to do well in China based on the success we have had in winning business in the cluster and infotainment product segments. Visteon’s sales in China have grown in high double-digits (percentage) due to several new product launches, as well as higher take rates on next-generation cockpit products. The auto market in China is very receptive to new technologies and we expect to do well in the near future with the exciting new cockpit electronics products such as next-generation SmartCore and multi-display modules.
To what extent is Visteon benefiting from the auto industry’s shift towards large complex displays?
The growing demand for digital content and the increasing interest in ADAS safety technologies are the main drivers of the cockpit turning into a multi-display environment. Visteon has made a strategic decision to focus on large complex displays as a natural extension of our cockpit electronics capabilities. These new displays are very different from the relatively small and flat digital displays that we have seen thus far in cars; the larger displays have the requirement of being curved for optimal viewing by the driver, and are also required to integrate new haptics touch feedback capability in addition to the usual touchscreen capability. For better optical performance and look-and-feel, these displays are bonded to a glass cover lens using advanced optical bonding technology. Visteon is one of the leaders in developing the technology in our manufacturing plants to optically bond large and complex shaped displays.
In addition, Visteon is also developing new display technology that is better than standard LCD technology in terms of brightness, contrast and color gamut but still operating within the power and thermal envelope that is required in automotive applications. This new technology, called microZone,™ is an alternative to OLED, which is not yet mature enough for automotive applications. We will showcase microZone at CES 2020 in Las Vegas, and we expect this patent-pending technology will do well in applications where high graphics and optical performance are required without sacrificing the reliability and lifespan that are essential in this industry.
In terms of the infotainment market, what trends are emerging and how is Visteon addressing them?
After rapid growth in its early years, the in-vehicle infotainment system had started to stagnate and not keep up with the advancements made in the mobile computing space. The proprietary and closed nature of infotainment systems offered by most car manufacturers, without over-the-air software updates and lack of third-party downloadable apps, made the system seem like it belonged to a different era. With the recent changes to the Android operating system to support automotive-specific requirements, the auto industry can leverage the advancements in the mobile space to offer a more compelling user experience in the cockpit.
Visteon has developed a new infotainment solution based on Android that offers an app store with downloadable apps in addition to state-of-the-art infotainment features such as USB and Bluetooth media playback, Bluetooth telephony, AM/FM radio, and wired and wireless Apple CarPlay and Android Auto smartphone projection. The system can use a built-in modem, or it can connect to the cloud through the user’s mobile phone as a wireless hotspot. We are currently developing infotainment systems for two large global car manufacturers based on this technology, with the first product launching in early 2020, and expect more customer engagements as we go forward.
Could you update us on your SmartCore™ business is shaping up, particularly in China?
SmartCore is the most advanced cockpit domain controller solution in the industry, with the first market introduction with Daimler in early 2018. Since then we have launched on additional Daimler vehicles and also on the Harrier SUV with Tata Motors, and are working on additional programs with six different carmakers, including OEMs in China. In China, Visteon is working closely with Tencent to bring its cloud services to the cockpit through integration with our SmartCore system. These new services include an artificial intelligence-based smart voice assistant, voice-enabled WeChat, and other services that require significantly higher computing power in the system. The first SmartCore with these new capabilities will be launched in China in 2020. We look forward to sharing further announcements about our growing success in this high-growth area.
ADAS is a fast-evolving landscape. While we are seeing an acceleration of level 1 and 2 driving automation, there are delays in higher levels due to the lack of an established regulatory framework and the technical challenge of providing safety in all driving situations. In terms of Level 2+ for cars in the near future, how do you see the market evolving?
Level 1 and Level 2 ADAS systems are typically implemented with smart camera solutions with radar as a redundant sensor. The computational demand is fairly low, and it does not require the use of advanced computing technologies such as convolutional neural networks. This is because in both classes of ADAS systems, the driver is expected to perform the most complex task of monitoring the environment around the vehicle and take whatever steering or acceleration/deceleration measures are required. However, once you get to more advanced automated driving such as Level 2+ systems that offer hands-off driving on highways with merge/exit and lane change capabilities, the system has to monitor the environment around the vehicle. The challenge of 360-degree perception to detect different objects and their velocity relative to the car requires more sensors with greater capability, as well as significantly higher computational power to run the AI-based algorithms.
It is estimated that almost a quarter of all deadly car accidents occur on highways in lane-change and merge/exit situations. Level 2+ technology has the ability to reduce these accidents significantly.
New regulations are expected to drive greater demand for Level 2+ features.
Separately, the United Nations body that is responsible for governing global road safety standards is working to publish new regulations for hands-off driving, which are expected to be released in 2021 for adoption in 2022. These new regulations are expected to drive greater demand for these Level 2+ features. Visteon is focused on the development of the centralized computing system that processes all the sensor data to perform the tasks of sensor fusion and perception to enable automated driving on highways with lane change and merge/exits. Our goal is to offer an open standards-based solution that includes hardware, software and algorithms and offers the best feature-to-price value to the industry.
We are seeing some softness in vehicle production. What is your outlook for Visteon’s business in 2020?
The auto industry has had a challenging couple of years with production volume declining from mid-2018 onwards and continuing all through 2019. It is expected that 2020 will also be a soft year from a vehicle production viewpoint. However, Visteon’s sales are more driven by our new product launches rather than underlying vehicle production growth. While we cannot give an outlook for 2020 just yet, we expect to continue to drive a high number of new product launches in 2020, similar to what we have done in the past couple of years.
Are you scouting for start-ups at this event? If so, in what areas?
We are always looking at new technology innovations. CES is a terrific venue for meeting with companies that may offer technology that could augment our core strengths in digital cockpit electronics. We are not necessarily focusing on any single area, but are always open to hearing new ideas and establishing new relationships.
