GRC：DCT project in China complicated

GIF Research Center is a worldwide leader of independent transmission development and engineering services. With the experience of more than 20 years in testing and development, GIF is covering the entire range from transmission concept design, CAE analysis, functional integration, software and calibration development,rapid prototyping, and testing, as well as project management, product planning, and turn-key project delivery. Ulrich Plewnia, general manager of GIF Research Center, introduced to us his company's efforts in promoting DCT technology in China.

Gasgoo.com: Last time you mentioned that the first test bed for automated transmission development in China was provided by GRC, and GRC plays an important role in the application process of Dual Clutch Transmission in China. So could you please give us further elaboration on how GRC's products and services contribute to China's auto industry?

Ulrich: Our workshop in Suzhou provides various engineering services including design and development, project management, software and calibration, test equipment, vehicle testing, rig testing and so on. On our customer reference list, you can find almost all the major OEMs and tier1 suppliers. Take our DCT project for SAIC as an example *, BorgWarner's Dalian plant may provide three critical components (the dual clutch module, the torsional vibration damper and the control module), and then Company A may provide the transmission control unit or TCU, Company B may provide the transmission housing,  and so on, but in the end, the work of integration, calibration, testing, improvement and field analysis was performed by GRC in close collaboration with GRC's headquarters--GIF in Germany. The staff interaction between the two locations and other GIF affiliates is key to successes in applying DCT in China.

We are open to any project in cooperation with our clients or willing to independently help the local Chinese automakers and suppliers develop their own automated transmission.

Gasgoo.com: Local-made DCT application in China is forecasted to start around early 2011. Within such a short period of time, it's possible that most of the DCT project teams will be unprepared for various unforeseeable problems. How was the DCT project going on your side?

Ulrich: The DCT project was quite complicated due to the time constraints and the difficulty:

●Hardware and software design

●Vehicle system interactions (hardware, software, attributes)

●Number of suppliers to be managed

●Several production plants (SAGW, SAIC, Supplier)

Here I can give you some facts based on a survey of 8,380 projects at 365 US companies. The result shows that 94% of all the projects have multiple kick-offs; only 16% are finished within time and cost budgets; the average budget overrun rate is 189%; average time overrun is 222% and 31% of projects get cancelled. So, you can see project management is key to success.

As for the project planning, we followed a down-up developed project plan. We choose this rather than a top-down approach or a bottom-up approach for three factors: consideration of higher level constraints and objectives, iterative alignment of all layers of plans and high degree of acceptance by project team members.

Also we take functional communication strategies for the DCT project. We set up a cross-functional module team led by GRC, which ensures development considering total vehicle needs. GRC is responsible for the integrated system delivery, including supplier management. I think that during the development of the project, people, processes and communication are the three key success factors.

We're planning to kick off a road-show event in March 2009, to showcase vehicles equipped with GRC-developed DCT transmissions to the customers and business partners in China.

Gasgoo.com: Could it be costly for the DCT transmissions to be volume produced and marketed?

Ulrich: The final price was determined not only by the key modules and components, but also the costs of labor, material, management and intellectual property.  As a result, cooperation of multiple players could lead to an economy of scale, thus to share the R&D cost and achieve win-win for all in terms of time consumption.

Gasgoo.com: it's reported that the year 2011 will be a turning point and since then automated transmissions (mainly AT, CVT, DCT and AMT) will take more market share in the Chinese auto market. How do you think of the growth of DCT?

Ulrich: In 2007, manual transmission cars gained 69% market share in China, while AT took 27%, CVT 3% and AMT 1%. DCT had its first market entries in 2008, but it's expected to see strong growth in China, following the European trend.

Automakers to use DCTs will focus on medium- and large-sized vehicles, including luxury and sport cars; an upcoming application will typically combines with 2.0 liter gas engines.

CT's long term strong competitor will be the AT, whose local development is encouraged by the government.

We're expecting the market share of MT in China will decrease to 64% in 2010, while AT, CVT, Amt and DCT will take a 30%, 3%, 2%, 1% market share respectively. Further, according to FAW's forecast, DCT transmission will take approximately 7%market share in 2013.

Gasgoo.com: As you are leading GIF's China business, what's your development plan for your company?

Ulrich: We (GIF) entered China in 2003, and we set up our local company-GRC in Suzhou in August 2006. Up to now, we've completed the first and the second steps of planning: get project from customers, establish business contact with the OEMs, and build our functional structure as the big companies do. For the year 2009, we'll take the third step, i.e. to strengthen our engineering capability. Our technical group offers service on testing and engineering, which will focus on transferring the best practices and expertise of GIF in Europe into China.

Then around 2010, we'll consider pursuing numerous opportunities to continue expanding throughout the Asian markets-like Japan and the ASEAN markets, we've already secured business contacts with several Japanese customers. And with each step of the development plan to be executed, we'll achieve doubled revenues year-on-year.

Gasgoo.com: I've heard that some technical service providing companies could make profit from offering slow service at a low price, or offer an affordable price for speedy service thus to have long-term business cooperation. What's your growth strategy for product and customer relation?

Ulrich: if we use the axes of customer and product/service to divide the coordinate plane into four quadrants: then it'll unfeasible to offer same customer with same product/service, so we won't consider it; we'll make every effort to develop new customers with new product/service; we'll be innovative to persuade new customers to use our existing product/service, and we'll invest in developing new product/service for existing customers.

Customers here are demanding the right products and they want speed. As China is becoming a significant player in the global automotive field, product development will have to consider China's interest and input.

Talking about particular examples, we'll offer customers with relatively fast service at a medium or high price to keep our business thriving. We seek sustainable cooperation for our long-term goal.

Gasgoo.com: Could you bring us some latest details about the Cone Ring Transmission KRG project under development? Could it be marketed in China?

Ulrich: The KRG project has secured two Japanese customers and a European one. We'll see it being used in Europe. As for the Chinese market, GIF is still seeking for the suitable partner; we're also likely to put it onto the market.

Gasgoo.com: Last September, you organized a GRC Transmission Technology Forum themed "Impulse for Innovation". What feedback did you receive?

Ulrich: Actually we (GIF) don't need any marketing activity in Germany. We have a stand at the annual transmission exhibition in Germany, which is also the largest expo in Europe, and we are the main sponsor for relevant technical seminar. But in China, marketing prowess is a key factor for our success; we need to grow with the whole market.

We've made a review of the 2008 event, and 81% of the participants said it met their expectations. We'll continue to hold the forum this September, and we'll invite experts from famous companies in transmission development (both OEMs and suppliers) and testing areas in the world to the conference. We'll analyze the trend and discuss the transmission development and testing technology.