Automotive Strategy

Key strengths and enablers

• Diversified portfolio and presence across passenger, commercial vehicles and tractor segments, with deep customer connect
• Precision products and solutions offering best-in-class enhanced performance
• Access to best-in-class technology along with in-house R&D that allows seamless new product introduction suited to Indian markets
• Innovative and quality products with longer service cycles
• Just-in-time order fulfilment and strong customer support
• Strong intellectual capital helps build upon customer trust

2.5x
Market growth

Operating environment

The external environment continued to remain uncertain and volatile. Post COVID-19, we saw a sharp rise in demand and the year started on a positive note. However, during the second wave, semiconductor shortage and supply chain disruptions weakened demand in the second half of the year.

Our response
We approached the situation with a high degree of resilience and focused customer engagements, thereby leveraging our agility as we continued to combat the crisis and rising to the top.

Although the demand outlook remained strong to moderate during the year, the headwinds came in the form of high commodity prices, especially steel, which is a major input cost for our products.

Our response
We deployed organisation-wide counter-measures to control costs through financial discipline. We worked closely with suppliers and customers to drive efficiency measures, such as commodity indexation and baseline referencing and Value Analysis and Value Engineering (VAVE) projects. This included localization, alternate sourcing and price and supplier negotiations.

The trend towards carbon-neutral mobility solutions will be a key enabler in meeting India’s commitment to bring its economy’s carbon intensity down to 45% and carbon emissions by 1 billion tonnes (BT) by 2030, at the COP26 this year.

Our response
We have solutions for electric and hybrid vehicles ready at a global level and are working on bringing those solutions to the Indian markets. We believe India, a cost-sensitive market, will have a gradual transition to cleaner fuels beginning with two and three wheelers and gradually shifting to mass mobility and PVs. We have products which are developed both locally and at the Group level to cater to this market. We continue our focus and strive to make current ICEs more efficient and greener as we transition towards a responsible tomorrow.

Reviewing 2021

• The Automotive Technology division saw a strong revival in demand after a sluggish 2020, leading to 50% year-over-year growth in revenues. Our proactive stance in an uncertain business environment, and focus on customer centricity, and focus on innovation, helped in achieving the following outcomes:
• Strengthened our position in the commercial vehicles segment through proactive planning and diversified portfolio. Our revenue from MHCVs grew during the year and we gained significant market share in our heavy duty clutch
• Positive response to new products
• Expansion in market share by providing well-researched, robust and timely solutions to our customers for implementation of new models
• Led the shift towards gasoline powertrains, aiding us in increasing our Content per Vehicle (CPV) by 60% in gasoline engines since 2020
• Sustained momentum in legacy products like tractor clutch segment
• Key account management has been part of our global strategy and a contributing factor in our excellent customer engagement, application support to enhance overall customer experience and customer satisfaction. Our effective communication system between customers and account management teams specially warrants a mention in the highly volatile demand-supply conditions. We were able to extend seamless support for our customers despite the volume fluctuations seen throughout the year
• We are working on building strong relations with new mobility players in the automotive sector. These customers demand agility, quick resolution, and out-of-the-box solutions. We leverage our experience, expertise and strong R&D competencies to develop customised solutions for this segment
• We introduced new transmission system components in the passenger car segment by leveraging our market insights. The key USP of the components is to reduce friction and increase performance. We have also introduced some customised designs, which have won us accolades from our customers
• We conducted multiple collaborative engagement platforms to understand the customer’s technology roadmap and plan our solutions and offerings
• We worked in partnership with our customers to manage volatility in external environment through faster approval and better planning, which strengthened our customer connect

A greener future for generations to come

People’s demand for mobility is on the rise worldwide. At the same time, cutting emissions is imperative. Providing a comprehensive, modular kit of drivetrain technologies, Schaeffler creates the basis for sustainable, fit-for-the-future mobility solutions. And with its autonomous driving innovations, the company makes moving around even safer and more comfortable.

Schaeffler as a system partner: a one-stop shop for sustainable drivetrain solutions

New products introduced in the market