Thursday 2023-08-31

The following interview is part of a series of intranet articles and videos regarding this year's strategic planning. An interview for HELLA as a whole has already been published. This is the second part of the series; articles and videos on Electronics, Lifecycle Solutions and Sustainability will follow.

The strategy update has shown that we have room for improvement in terms of profitability. Profitable growth is therefore the central priority for HELLA. What does that mean for the BG Lighting?

Yves Andres: First of all, it is important for me to emphasize that we can be extremely proud of our technological leadership. It is part of our DNA. For a long time, however, we saw it too much as an end in itself, rather than as an instrument for profitable growth. After all, our technological leadership only becomes an asset when we use it to create added value for customers. So, we need to think more from the customer's perspective: What does the customer need? What can we do to help the customer? To do this, we all need a deep understanding of the market and the customer. This is very important to me for each and every individual in the entire Business Group. Because only when we really understand what our customers need, we can channel our technological leadership into products that are tailored to customer needs and will then be in demand. Innovations such as Front Phygital Shields, Smart Lighting and Digital FlatLights for V2X communication are, by the way, the first examples of this market- and customer-oriented development approach.

Can you explain that a bit more?

Christian Göke: The entire market is in the midst of transformation, which is naturally also reflected in customer needs. With our innovations, we reflect this change and focus on the number one growth drivers: electromobility and autonomous driving. For example, with our Front Phygital Shields. They replace the radiator grille, which is not needed in an electric vehicle, and add real value to e-vehicles in terms of functionality and design. A plus that upgrades the vehicles and gives OEMs competitive advantages. Or our V2X solutions, which enable communication between the vehicle and its surroundings in autonomous driving. Innovative lighting solutions also play an important role in the camera systems used for autonomous driving and offer us further attractive and profitable growth opportunities.

Are there other strategic aspects that are important for profitable growth in the BG Lighting?

Yves Andres: Definitely. We need to carefully evaluate and reshape our customer portfolio. This means moving away from the claim that we serve everyone and instead being more selective. Ultimately, when selecting our customers, we should always ask ourselves whether a collaboration is actually worthwhile, i.e. whether it is profitable for us. Of course, our customer strategy is also shaped by the transformation on the market. For Asia and North America in particular, we expect growth opportunities in the coming years. China, for example, is the place to be when it comes to electromobility. That's where the customers are who need our high-tech innovations. We have somewhat underestimated this enormous potential so far. Now we have to step on the gas and confidently play to our strengths in Asia and North America.

Christian Göke: There are also internal starting points for increasing profitability. For example, we have fourteen different module platforms, which ties up capital and is cost-intensive, but of course there is a reason for this. However, in this way we develop an individual lighting solution for almost every customer model. This makes our product landscape and therefore also production very complex. Our goal here is also to reduce product diversity and complexity through greater standardization and to standardize production processes hand in hand, e.g. with our Universal Assembly Line concept.

There are many OEMs in China. Which ones are we counting on and do we have the know-how to survive there?

Yves Andres: We will be selective in China and identify those of the more than 200 OEMs that suit us. The focus of the offer from OEMs is currently still in the low-price segment. But quite a few representatives of the luxury class and the higher-value volume market have already approached us; they want to work with us as a technological leader to achieve customer-oriented differentiation. The necessary know-how and strong cost awareness are provided above all by our colleagues on site, in the spirit of 'local for local'. They know the country, the market, and its end consumers very well. Especially in digitization we see great opportunities.

The BG Lighting has developed its own mission statement: "We SHINE to advance mobility experiences". What's behind it?

Yves Andres: Our mission statement translates the FORVIA statement and breaks it down to our BG so that it becomes tangible for our employees and partners. SHINE summarizes what the BG Lighting stands for: safety & sustainability, hubs, i.e. local excellence in a global network, innovations & icons, nurturing of talent and execution excellence.

Let's look to the future: What is the biggest opportunity for the BG Lighting?

Yves Andres: Seeing risks as opportunities! Until now, we were focused on Europe, Asia was perceived as a threat from an economic point of view. This has changed completely, the Asian and especially the Chinese market offers us huge opportunities for profitable growth. It is very important to me that all employees understand this and share it. By the way, we also see opportunities in NSA to do good business, especially with local, American customers.

And what is the biggest challenge?

Christian Göke: It is important that we assess our customers correctly and do not underestimate our competitors. After all, Chinese companies are also quite active and very fast in the supplier sector. In all likelihood, a Chinese automotive supplier will be in the top 6 worldwide as early as 2025. In addition, we see that, driven in particular by electromobility, new customers are emerging and "top dogs" are losing weight. All the more reason for us to keep our eyes open, step on the gas and keep up the pace. But I am very confident about this, after all, we were the ones who put Tesla's lights on the road in less than 15 months. "We SHINE to advance mobility experiences."

Yves, is the BG Lighting well positioned for the future?

Yves Andres: Absolutely. We have great technologies, a high level of innovation, and highly motivated and committed employees. We have an excellent reputation in the market and with our customers. If we now readjust a few screws along our strategy, we will have created all the conditions to remain on course for success in times of change.

Yves, Christian, thank you very much for the interview.