To Swamy Kotagiri, Magna International Inc.’s new president, a car is more than the sum of 30,000 parts that weigh 2,800 pounds. It’s also 100 sensors, a mile of wiring and 100 million lines of computer code.
It’s this complexity and diversity that drew the engineer into the automotive manufacturing 25 years ago after leaving his native India to study in the United States.
“I definitely see the vehicle as a technology platform,” said Mr. Kotagiri, a 20-year Magna veteran whose former role was chief of technology at the world’s third-biggest auto parts maker, based in Aurora, Ont.
Magna’s diverse product portfolio, everything from mirrors and door latches to sensors and body panels, sets it apart from other parts makers, which tend to specialize.
The technology that Magna makes includes the lidar systems and electric powertrains that are gaining popularity as consumers and car manufacturers slowly shift toward electric and partly autonomous vehicles. But for all its focus on automated and driver-assisted technologies – Magna likes to call itself a “a mobility technology company” – the bulk of Magna’s sales come from the division that stamps car bodies and panels for pickup trucks and SUVs, not gadgetry. That is not going to change overnight, Mr. Kotagiri said in an interview.
“Exteriors and our body and structures group, which is called Cosma, will have relevance at least for the next two decades, no matter what we are talking about,” he said. “The materials and the designs will change, but you’ll still have a body and a chassis, in very simple terms.”
Mr. Kotagiri steps into the No. 2 job at the auto parts giant at a time when its customers – General Motors, Ford and the rest of the world’s automakers – are grappling with falling sales. Magna last week forecast lower sales for 2020, and ended a partnership with ride-hailing company Lyft Inc.
Ray Tanguay, a former chairman and president of Toyota Motor Manufacturing Canada Inc., who serves as an auto industry adviser to the federal and Ontario governments, said Magna is investing in advanced technologies, but is primarily a key supplier of major components to the world’s biggest automakers in North America and Europe. It’s a market that, while not growing, is large and robust.
“They are very diversified, from seats to subframes. And they are investing in advanced technology. They recognize electrification is something they need to be part of,” Mr. Tanguay said.
Under chief executive officer Don Walker, Magna has invested in advanced technologies while not getting ahead of what its main customers want, Mr. Tanguay said. “They want to be a player, but their core business right now is very traditional.”
Magna said it is ending the US$200-million partnership with Lyft to develop and manufacture autonomous vehicles. Magna is backing away from the development of fully autonomous vehicles – levels 4 and 5, in industry parlance. The hurdles to the rapid adoption and development of this market include roadway infrastructure, legislation, standardization and high costs.
Instead, the focus will be on developing technology and systems for cars that fall into levels 1, 2 and 3. These cars offer automated functions that range from adaptive cruise control all the way to self-driving in traffic jams or on a highway.
“That’s a significant market,” Mr. Kotagiri said by phone from Magna’s offices in Troy, Mich. “The technology is still evolving so we have to keep an eye on it, but right now the focus would be on the assisted driving of the level 1, 2, 3.”
The advent of Lyft, Uber and other similar services has only just started to change the way consumers look at cars. The notion of the vehicle as an extension of oneself will recede. So will the importance of fit and finish, and how fast it accelerates and brakes, Mr. Kotagiri said. Rather, the car will become an extension of the living room or office, connected, adaptable and intuitive.
This is a long way from the personal jetpacks or, more realistically, the steering-wheel-free vehicles some predicted would transform the business of personal mobility.
Vehicle users today and through the next decade are more likely to be focused on what they can do in the car – swap messages, keep working – than how the car looks and handles, he said.
The car will run partly on electricity, and might be shared or part of a subscription fleet. As Mr. Kotagiri puts it, “How can I work? How can I connect? How can I get from point A to point B?”
Those are deceptively simple questions, ones he will bear in mind as he makes his first moves as the second-in-command at Magna, a job some believe makes him a candidate to be the next CEO.