C Talk | Martin FISCHER of FORVIA: Powering the Next Chapter in Automotive Innovation

It's a great honor and I'm humbled as well at the same time facing really a great fantastic role to lead for VR as such a strong automotive supplier into the future. Coming in, of course the first moment is who is for VR and it is about the people obviously. So when I started connecting with the teams I was really intrigued by the level of business orientation, by the accountability that people take, and a good attitude we can do. And this is very important for me as a new CEO because I will drive a lot of change over and through the company and I need people who buy into that change quickly. So that was maybe some of the first observations. And then obviously there's the business part as well. So I see that we have built a very good portfolio over the years. So you saw us acquire other businesses. Hela was the last big acquisition. So when I look at the portfolio, it's a very good mix of stable businesses. We have the seating business, we have the interior business, it's got to be part of every car. Right. No matter if it's a combustion engine driven or electrically driven, no matter if autonomous or conventional driving. So it's good to have a stable access in the business in transforming times. But then also we have the real growth elements. So we look at software and electronics products and of course that's where a lot of investment goes in but also a lot of growth can be harvested in return. So that makes me feel very strong about the portfolio. And the third point people portfolio is a customers obviously and we look at a very fine diversified customer base. And that's true globally. That's also particularly true here in China. We had our start 30 plus years ago with some of the international OEMs. Today we are already 50/50 with our Chinese OEMs. And that's growing. So when I look at our new order intake, we are even going to be stronger with the Chinese partners. So people, portfolio, customers gives me the feel, yep, there's a solid base to work from.

Those were my three observations and I mean that's the starting point. Now obviously I have to go forward and yes I captured my priorities the strategic priorities in fact also in three. And the first one is our performance, operational and financial performance is very important. The continued transformation of the business, develop forward, shape our portfolio. And the third one is a truly invigorating culture that I want to have with for via that all our employees really nurture a culture that's very motivating and very performance oriented. So those are my three as we speak.

I mean when I really sit back and go maybe beyond the actual technology trends. We always talk about electrification and automated autonomous driving. But when I really sit back and say what are the overarching trends, I think I want to mention sustainable mobility. That's going to be important for the planet for the humankind and then individual drivers as well. And next to sustainability, I see really an individualized offering to the mobility needs of our final customers. And those are the two I think from which we then can derive really specific technologies, specific orientations for the company.

Absolutely. I mean that goes a little bit with our mission statement. I don't know if you are aware of it but our mission statement is we pioneer technologies for mobility experiences that matter to people. For VR is looking to the final customers and by understanding their needs we can very well support our OEM partners with fresh product, fresh technology and fresh functionality. B2B2C, that's exactly the chain.

In my view and in our view as for VIA, the trend is so clear. So we truly believe into electrification as being the longer term solution also all over the place. And then you characterize it very well. It goes at different speeds and sometimes there are setbacks, little speed bumps, but in general this trend is very real. What is for us very important is that we structure our portfolio, our activities to help OEMs to support OEMs in all technologies. So we are still having great innovation also in the field of internal combustion engine. And when you think about it, that model will be there for a while. Maybe in the form of range extenders, maybe in the form of plug-in hybrid vehicles. And with our sustainability push, we really want to make sure that these vehicles are as clean as they can be and also as comfortable. So, give you an example from that range. We are just developing devices that make range extenders much more comfortable in the sense that they are noiseless. You remember when you drive an electric vehicle and the engine comes out? That's very disturbing. The NVH problem is really, you know, so we have little actuators, little technology tricks that take NVH out and that helps again the comfort that somebody can have with still combustion engine supported drivetrains. Be great investment field, right? We do battery management systems. Something that we also showcase here in Shanghai. How we package more and more electronics into a limited space and have synergies by packaging battery management and energy conversion functions into one device. But that's not enough because with our sustainability drive, we look also beyond and what you can see at the for display this week is our hydrogen tanks. So we also have an activity that goes even beyond battery electric vehicles to support hydrogen as a propulsion means and a very clean technology of the future.

Yeah. And that's important in terms of robustness of the portfolio. Back to your original question, depending on what goes how fast, we can still earn money, produce sales with the different technologies.

That's a very good question. So what we have done in the hydrogen field, we really pushed into it and we prepared these hydrogen tanks but also even hydrogen fuel cell stacks. We have good solid product engineered but now the question is how fast is the market. So we have basically paid and invested into our entry ticket so we can support customers with the product and now we doze our efforts and say okay when is it time to go fully in but in the meanwhile we have the competencies already in house and we can work with the customers on the way.

We are ready.

It takes a lot of coordination and synchronization and time to make autonomous driving or highly automated driving happening. First of all, being an engineer myself, I want to really acknowledge the amount of engineering that goes into a solid system and I think on the journey from level two to three to four systems, there's still much more that has to be done to make these systems very reliable. So, I think that is one path and that's going to take a little while until we get to that. But at the same time, regulations, the ethics around the systems, insurance questions, liability questions that has to be all resolved. And it's interesting that different markets, different countries take different approaches. I think there's a very bold and broad approach pushing in China forward politically and from the company side. Europe went ahead and created a regulation for highly autonomous vehicles. But there has to be more investment still to come into technology. And then the US is putting vehicles on the road as well, right? With some early starters that are highly autonomous. Whimo for instance. And the acceptance of the customers of the riders so to say that is a question. Is that going to be broad enough to justify their investment case? So, a lot of things have to really fall in place to make that a big global trend, a big movement so to say that it happens. And China obviously is driving very very large.

I think it's going to take a while before it really comes a true full business model.

It is. So when you come from the engineering point again it is good if you can limit somewhat the design domain or the complexity of it. So it's good to start maybe in segregated lanes or in dedicated lanes before you go really into free traffic flow and I believe on the industry side that's a responsible way of moving from one complexity level to the next. Always learn use the good amounts of data that are being collected from the first level to the second to the third and that's the development I see coming.

And that's our attitude also as for we develop sensors we develop algorithms and safety is the priority number one right cannot put anybody at risk through our product. So that is key in fact.

It's getting all over the company right both internally in terms of supporting our processes to be more efficient and then also it gets into the products obviously. So when we look on the product side AI has been incorporated in many of them. So image processing vision has a lot to do with AI obviously. So one good example is we just showed a new cluster and it's without touchscreen it's without dials and buttons to use but we use now the driver monitoring system to see where is the driver looking what feature is the driver selecting and then we choose the respective feature and that is obviously based on AI. So there's many examples that we start. It's just the beginning right and that's just the beginning. I mean when you look really into the most powerful AI that we have nowadays, you certainly look into the infotainment options. You might know we operate one of the most obvious or most distributed app stores. So that's our apping business line. And when you then communicate with the car and with that app store that is obviously now being prepared for large language modules. So it's going to be a very natural way for the driver or the passenger to interact with the app store and with the infotainment devices.

That's a very important strategy process, right? We say allocation, it is important to know where we invest going forward and we apply a very rigid strategizing and then capex and fund allocation to the areas where we see the best benefits from the investments. What I'm always excited about is if we innovate together under the four via roof as one for VR. And you can see with these customer centric functions that system start blending. Let's say we have a driver assistance system and that's responsible for guaranteeing safety of the vehicle right and it's going to apply brakes and most of the times that's going to be good but maybe not all accidents can be avoided due to some other traffic participants behaviors. So what we are working on right now is how is the driver assistance system going to work together with our seating systems. Why is that? We want to have comfort seating, right? We have now a 60° seat which is of importance in the case of a crash because you have to protect the passenger. So what you want to do is bring up the back rest at least to 45° from this most comfortable 60°. So now the driver assistance system has to interact with the seat system. And here's our teams, right, putting fords together and determining how much time do you need to bring the seat up? Not much. When is the latest point in time to warn and to bring that seat back up, it should still be a bit comfortable, right? It cannot be terrifying on the user or on the driver or on the passenger. So those are the areas where we move different business groups together and as one for via can create new functionality that helps again the end consumer and our OE customers.

We are very Chinese in China. So we have a strongly empowered team here on the ground and over the last years we drove initiative that we called west to east because we wanted to very consciously bring competencies and again that level of empowerment to the team here in China and to our headquarters R&D teams in Shanghai and all over the place. So I think that is a prerequisite to work in the same culture in the same language with that same good mindset towards speed in the first place but also cost consciousness, consumer centric innovations and all that happens right now with our China team. So the old days when innovations happen to come from Europe and then we apply it here to more the international OEMs that's over. We innovate in the country for our local OEMs. And what's really beautiful is some of these very good inventions also then find the way back to Europe or to the Americas because they are just so intriguing.

I can share some best practice. I was in the US actually early in March and we did a little bit of a technology demonstration and one highlight was the seating comfort features that we presented. So you can think about it heating cooling but with very advanced massage features as well. That was an invention as you can imagine here in China right where people spend so much time in the vehicle and want to have that comfort. The moment we showed that module, that comfort module to the customers in North America, they were blown away. So there's a run on that product in a different region as well.

No, it's much more direct, a bit more intense, right, than what we have seen from the pneumatic systems. So that's what our consumers I think will enjoy here.

We are very happy that we can rely on such a strong educational system in China. So we work very closely together with universities here to really identify talent early and win talent in for for VR. And then it's about the development. So it starts really with typically recruiting engineers and have them at their best engineering new ideas. But we further develop our employees from very good engineers to good leadership and to good entrepreneurs finally. So they can head up businesses for for a year. How? So that's by exposing, by trusting, by challenging and also taking little risks, right? Not to say it's always the long timers who can do the new things. No, it's our fresh people with their creative thought that we want to have really in the race. That's encouraging, right? And it's fun to observe the development of so much really good and young talent. And we have a couple of special measures also on the site. So we run innovation competitions and we do that inside of for so teams can create and can apply for winning those competitions and we do it also in collaboration with our targeted universities. So you can see how we generate a cloud right a field of innovation around the company from the get-go.

And that starts at the base but it also shows throughout our top leadership organization. So when I look at my executive committee my direct reports there's today three leaders from China. One leading the region obviously that's maybe straightforward. My strategy boss is of descent and also one of my global business group leaders is a Chinese native. So we show that China is important as a market and that there is no limits to personal growth within Forvia.

I think there is always a next China, right? China manages to reinvent itself and push to the next levels of technology and therefore of business. That's why it's so important for us to really be part of that ecosystem here and that's why we look for all these good contacts to universities of course to our customers and to business partners of all sorts because we want to be a part of that future growth story.

That's a continuation of the good relationships that we have developed over all these years and we have that strong foothold with these Chinese OEMs in China and now really comes a prime goal to say we help those customers going global and we can do so because in many of the markets that are being targeted, we are already established very well. We have teams on place, we have plans, sometimes even open capacity to be fast, but also we can relate to the ecosystem in these countries. And you want to understand the political landscape. You want to understand regulations. Products might need to be altered a little bit because regulations are different country by country. And those are the strong points that for VR can bring to our customers in their global endeavors.

That's exactly one of the examples, right, where we could help BYD, for instance, very fast to get up to speed and into production. The same thing is now happening in Europe. So again, we were working for instance with BYD and with their new plans in Hungary and Turkey, we'll be there to help.

I have no doubt that good product and technology is going to be brought to those marketplaces and they also going to be competitive. I think that is an important must have. I believe the point to work at for the Chinese OEMs going global is that they really become good corporate citizens of the targeted countries. Right. So a Chinese OEM in a European country has to show a European face in order to be fully accepted. And when you go back in history a little bit and see how the Japanese or then the Koreans conquered the various marketplaces, that was always a very important ingredient of their success to be Toyota in North America as a solid employer as a solid corporate citizen working the communities and so on. So I believe that third point is very important for the Chinese OEMs also to find.

And then live it, right? Make it part of the culture. The way that for Via is Chinese in China, I think a Chinese OEM has to be German in Germany or French in France.

That's a pleasure. Obviously, when you come to see our display, you see one vehicle that we have defined, right? That's a sapphire vehicle. And what we try to do is really pack all our product into that one vehicle concept to show how we lead into the future and it covers all our activities areas. So we look into safe and automated driving. And we have energy management, battery management, electrification. And then we have sustainable and digital cockpit environments and cabin environments. And all those three you will see. And what we showcase is pretty much as a driver or a passenger, how are you going to interact and enjoy that vehicle? So the vehicle will know you by the time you approach, right? And it will already give you the information you want to have from the vehicle. So we have some exterior displays from the lighting business group that's going to give you the state of charge or welcome you. So that's configurable to the like of the consumer. So here I'm already getting in touch with my car. The door opens, you'll get into an environment that we designed with our seating and interior teams. And even though it's a compact level car, it feels spacious. So, we have found concepts to show and share with our customers that just utilize that space to the maximum degree. And it's very versatile. Because in China, our buyers, they spend a lot of time in the cars not only for the commute, but also for having a lifestyle with it. So you'll see very versatile interiors, seats that swivel electrically. So you have your campfire seating, you have tables wherever you need them. They'll fold. They'll stow away electrically. When you need them, they'll come up. So really an environment that supports the lifestyle of our young generation buyers here in China. And then on top of all that, we also follow our sustainability ambition. And all the materials that you will see and touch and feel are sustainable materials. So either renewables or recycled materials and you can feel the quality of those. So you see we pack everything really into this vehicle to say we are consumer centric in our offerings. We think like our OEMs and we prepare then the very dedicated product in order to fulfill the consumer expectations.

It's beyond concept. We're good. And with the kind of speed that we go really from innovation or let's say from invention even into a real serious production that has been shortened quite a bit.

I have been enjoying really tremendous days out in Shanghai and I enjoyed the spirit that we put into our conversations and that was a lot about I would say pragmatic collaboration in the sense that customers really want to see what can for VR bring to the party what are the new functions features products that can be quickly serving our customers here and that pragmatism to say hey we don't have to invent it all ourselves of the OEMs but we want to rely on a strong partner for VIA. I found that really energizing and that's what we do. We are going to follow up and really bring a lot of good product at good cost as well that still matters in China so much to our customers.

You made my day coming in here and really diving into the Chinese thing. I like so much that enthusiasm and the energy levels and I can see that everybody is really excited about showcasing the technology to our customers here in the auto show and that carries our business a long way. So I truly believe in empowered teams and I truly believe in that excitement that's going to separate us and differentiate us also from competitors.

In the future decade, we are here. We are here to stay and we are here to drive that market success forward. And we do that really in great collaboration with our customers the way I just described it. Being very open, very pragmatic, bringing quick solutions, bring them on the road and move on. Move on. Be fast.