Visteon CEO Bets Company's Future on Autonomous Vehicles

Matt Posky
by Matt Posky
visteon ceo bets companys future on autonomous vehicles

After spinning off from Ford in 2000, Visteon has set a corporate goal of expanding its supplier business to other companies. However, it hasn’t been smooth sailing. Granted Chapter 11 bankruptcy protection in 2009, Visteon emerged intact from its reorganization the following year. By 2013, the automotive supplier announced it would pare down its operations to focus primarily on vehicle electronics and HVAC systems.

Now, CEO Sachin Lawande says the company’s future hinges on autonomous vehicles. At this week’s Consumer Electronics Show in Las Vegas, Visteon will unveil its new DriveCore platform, a central control unit for electronics and software in autonomous cars known as a “domain controller.”

While DriveCore is essentially an evolution of the preexisting SmartCore platform, which is currently being prepped for customers in Europe and China, it represents a major leap forward into unfamiliar territory. Visteon missed the boat when it came to advanced driver assistance systems, and most established suppliers diving into autonomous tech have a background in products like emergency braking, adaptive cruise control, and lane assist. But Lawande says his company won’t miss the next evolution of automotive technology.

“We know people will say we have no capabilities or experience in this space, but about a year and a half ago, we created a completely separate unit to focus on this and this only,” Lawande told Crain’s Detroit Business. “I’ve had to make a lot of tough decisions because we weren’t innovating in the right areas. For us, this is a big bet, but if we’re able to fundamentally change Visteon and prove this [DriveCore] out, we’re going be successful.”

While most automakers and rival suppliers have tried to add autonomous technology talent by purchasing other companies, Lawande hired an engineering team that now numbers 100 people to create DriveCore. It’s a big gamble for the supplier but, potentially, a wise one.

Products attached to advanced driver assistance systems are expected to grow to 20 million units by 2023, according to IHS Markit forecasts. That’s a significantly larger number than the growth anticipated for cockpit domain controllers that only deal with infotainment and heads-up displays, which is expected to reach roughly 8 million units by 2026. Mark Boyadjis, principal analyst and manager of automotive user experience at IHS Markit, explained to Crain’s that Visteon sees the gamble as a shrewd (and probably necessary) measure.

“With every new [automotive] feature comes a new electronics control unit and [automakers] are at their wits’ end,” Boyadjis said. “Now with these domain controllers, they see a way to combine the ECUs with less complexity and less cost. It’s of strategic importance for Visteon to be doing this because, like their peers, they were beginning to offer these domain controllers in the cockpit that were essentially eliminating hardware they were supplying. Everyone is asking how this won’t affect their bottom line and the answer is to produce them for more than just the cockpit.”

However, Visteon will enter into some exceptionally fierce competition. Not only from other suppliers, but tech giants that have focused on autonomous tech for years and automakers that are implementing their own AV programs.

“When it comes to the big giants of Silicon Valley, they are extremely formidable, that’s why we spent a lot of time where we felt we could operate,” Lawande said. “Continental and Aptiv have no chance in competing against Google and neither do we, but we’re at the cusp of really exciting things for the company. We’re already in discussions with [automakers] about putting the DriveCore system in vehicles in the 2020 time frame. After 2020, we expect this to pick up and become a significant portion of our business.”

The good news is that Visteon has seen some stability after years of selling off large pieces of the company. Now focused entirely on interior electronics, the supplier is in a far better position to pull something like this off. The bad news is that the company’s very existence might hinge on DriveCore’s success.

“I, generally, believe in finding a space where not everyone is focused, and I think we’ve found it” with SmartCore and DriveCore, Lawande said. “We had not invested in core capabilities on the software side. I had to make some very fundamental changes to the company’s structure. This is not the same company as it was a few years ago. We’re focused on Visteon 2.0, and we’re doubling down, and it’s going to pay dividends.”

[Image: Visteon]

Join the conversation
2 of 5 comments
  • Sceptic Sceptic on Jan 09, 2018

    Another old economy company run into the ground by incompetent management. Goodbye Visteon.

  • Mike9o Mike9o on Jan 12, 2018

    I was in a meeting with Visteon about 10 years ago when the company I work for was shopping for a new audio system for an upcoming CUV. There might have been 20 of their employees in the meeting versus 6 of ours. No one was introduced and they would randomly get up and leave the meeting without explanation. It was odd to say the least. We went with Delphi.