What’s behind Yanfeng Visteon’s "Q-e" concept car

Yanfeng Visteon Automotive Electronics Co., Ltd., a subsidiary of Visteon in China, has showcased an electric concept car "Q-e" at the 2010 Beijing Auto Show. Robert C. Pallash, Senior Vice President of Visteon Corporation introduced more about this car and Visteon's R&D in China to Gasgoo.com and National Business Daliy. Below is the interview transcript.

Gasgoo.com: First please introduce the "Q-e" concept car and why you lauch this car with your partner in China?

Robert C. Pallash: The Beijing Auto Show was always going to be a big event for Visteon this year. Well ahead of time, we talk with our partners in the Yanfeng Visteon joint venture, and came up with a concept of the Q-e vehicle, which we think will attract the public, customers and partners here, to come and see the new technologies that we are introducing and presenting in Q-e. So it’s a concept around appealing to the young generation, who live inside the cities, who want a very economic and environmentally friendly car. And for the first time, it’s not just a vehicle, but it brings your home as well into the vehicle, so you can drive it to work, but you can also use the vehicle in another ways as a place to do gaming, or to watch the internet, or to just relax, listen to music. It’s a very nice vehicle; we are very pleased with that.

The outside and inside of the  "Q-e" concept car

Gasgoo.com: The vehicle appears to have some Chinese themes in it, such as the feeling of “Qi” (a Chinese character with profound philosophical meanings) in it.

Robert C. Pallash: Yes, I’ m glad you see that. We try to introduce several key Chinese themes. The roof of the vehicle which has solar panels in it also looks a little bit like a Chinese roof from our house. And inside of the vehicle, we try to do two things. One is to take themes from a modern Chinese home, so bright color, there is a lot of yellow inside the vehicle, and we believe the lines and the combination between the lines and color give a strong sense of “Qi”. Glad you saw that!

Gasgoo.com: Are you going to produce that car?

Robert C. Pallash: Absolutely not. We don’t make vehicles. But clearly all of our products go to the vehicles with many different customers in China and around the world. It’s very useful to use a concept vehicle. We did it in the Shanghai Auto Show. And we’ve done it again here in Beijing. It gives us a place in which we can show our technologies and our products. But we are not going to make vehicles.

Gasgoo.com: So you want the OEMs in China to use your technologies showed in the vehicle, such as ChangAn Ford, maybe your biggest customer in China?

Robert C. Pallash: Probably not our biggest customer in China. We have a very diversified customer base with our partner Huayu and SAIC. Shanghai Volkswagen and Shanghai General Motors are two important customers, as is our partner himself – SAIC Motor. We really have a very diversified customer base -- European, American, Japanese, global as well as increasing number of local Chinese customers, with whom we are growing very quickly.

Gasgoo.com: What might be the challenges in cooperating with local customers?

Robert C. Pallash: First of all, they are a very important part of our customer base in China. We have been doing a lot of work over the last three or four years to better understand their needs and their objectives. But I think it has given us new challenges. For example, these companies tend to work at a speed that is faster than car companies in other parts of the world. Visteon has adapted many of its processes in the way we do our work, so that we can deliver faster, but still as a partner to ensure this customer group continues to be able to build its quality and the value it presents to a customer inside of their vehicles.

Gasgoo.com: When we had interview with Visteon in March 2007, we were told that Visteon’s Asia Pacific business (including the joint ventures) would account for 40 percent of its global business in three years. Now three years passed, has Visteon reached that aim?

Robert C. Pallash: Yes. In 2009 the consolidated sales from the region were just at 40 percent. When we look at our consolidated and unconsolidated sales this year, they will be more than 40 percent. We are very proud of that, we continue to grow very quickly.

Gasgoo.com: Can you introduce more about your Asia Pacific development plan?

Robert C. Pallash: Asia Pacific is for us a key growth and development area for all our different product groups. Interiors, Climate control, Electronics and Lighting are now all present in all the key markets in Asia, not just China which is today our biggest market here, but also in other growth markets like India, where we have set some ambitious growth plans as well.

Gasgoo.com: We know that Visteon has a R&D center in China. Can you tell us something about its current and future functions?

Robert C. Pallash: We have one main China technical center in Shanghai, but we have other centers for applications and engineering work close to our customers as well.

In Shanghai, the main activities are on the interiors side. We are still the leading automotive interior supplier in China. It’s very important that we have the ability to do the concept work, which you see some of that in the Q-e vehicle, and to do the design, development, engineering, the tooling work right through to production. That is a real competitive advantage we enjoy in the market place. We will continue to build on that. It’s a business that is going to continue to grow in the next few years. We will strengthen the engineering further.

On the Electronic side, it has even more of a global responsibility and interactions. The engineering team in Shanghai is very much integrated in Visteon’s global engineering for electronics. It designs products not just for the China market, but also for the Asia region, and also products that go to North America, South America and Europe.

Outside of the joint venture, we are also starting to grow our engineering capability here for our Climate control and Lighting products, which are two other product lines that we believe can grow a lot more in China.

Gasgoo.com: So you have been able to design in China and design for China?

Robert C. Pallash: Absolutely, and we take the lessons we are learning like speed, the element that I refer to earlier. So we are able to produce designs quickly, to your point, we are also able to do it at a very competitive cost, because we are learning from customers who are driving cost down. But also products as you will have seen with the ACE-I Electronics consolidted in the vehicle, products that offer a lot of value inside the vehicle as well.

Gasgoo.com: We know that the price of raw materials rises a lot this year. Does this impact the price of your products?

Robert C. Pallash: When raw materials price go up, everybody has the same challenge. The customers want to keep the price and value very competitive for the consumer. We also have a need to be profitable so that we can continue investment in our business. So the challenge is always to minimize the impact on customer. We do that through looking at smart ways to take cost down of the technology, of the ways we do design, and of the process we use to manufacture.