table of contents - hansen report

1

The Hansen Report on Automotive Electronics, July/August 2016www.hansenreport.com© 2018 Paul Hansen Associates, 150 Pinehurst Road, Portsmouth, NH 03801 USA

Telephone: 603-431-5859; fax: 603-431-5791; email: [email protected] rights reserved. Materials may not be reproduced in any form without writtenpermission. ISSN 1046-1105

Vol. 31, No. 3 April 2018

Table of Contents

Cybersecurity Update 2

Nvidia Bets Big on Self Driving 5

EXO Technologies Developing Precision 8GPS for Autonomous Cars

The Company Profile: KOSTAL Group 11

PwC on Myth vs. Reality 21

www.hansenreport.com

The Hansen Report on Automotive Electronics, April 2018www.hansenreport.com

2

Cybersecurity Update

Kevin Tierney, recently appointed chief product cybersecurity officer forGeneral Motors, talked to us about global collaboration and the dramaticimpact security is having on E/E architecture. “Nothing in the last 20years has changed electronics design and architecture as much ascybersecurity,” he said. Mr. Tierney, with his team of 85 engineers, isresponsible for connected-vehicle cybersecurity throughout GM,including OnStar and mobile apps. He reports to Jeff Massimilla, vicepresident for global vehicle safety and cybersecurity, whoseresponsibilities now include product, information and manufacturingsecurity, GM Financial, and GM’s autonomous vehicle developer CruiseAutomation.

ArchitectureMr. Tierney’s team works closely with GM’s electrical architecture teamto build security into vehicles, providing authentication, isolation,segmentation, and secure interactions with service and manufacturingtools. GM began to address security issues in 2011 and lately has beenadding new security features to its vehicles almost every year. “Somethings that have limited impact on existing architectures can be added in amodel year,” he said. “But some of the newer security control strategiesthat take more [network] bandwidth, or more security cryptography, ornext-generation microprocessors, have to wait for the next-generationarchitecture.”

GM is implementing a defense-in-depth strategy, with multiple layers ofsecurity, from the chip level to the network architecture (how things aretransmitted on networks and how each network is isolated from theothers) as well as monitoring and securing how the vehicle communicateswith the the outside world.

At the chip level, GM is employing standardized security feature sets suchas hardware security module (HSM) and secure hardware extension(SHE). The EU-sponsored EVITA project developed HSM profiles tosupport authentication, secure ECU-to-ECU communications and securecommunications with sensors and actuators. SHE drivers control thehardware security peripherals in the HSM domain. Developed in the HIS(Herrsteller Initiative Software) working group by Bosch subsidiary



3

Escrypt for Audi and BMW, the SHE standard allows for secure zoneswithin an ECU. Those secure zones can be used for storage of securitykeys, authentication, and encryption and decryption algorithms.

CAN, the controller area network introduced by Bosch in 1986, wellbefore telematics and vehicle connectivity, was not designed withcybersecurity in mind. It is too slow. “Security is driving the need forincreased bandwidth. On a 500 kbit/s CAN network I might not be able toadd the authentication I need and still be able to transmit the message,”explained Mr. Tierney. While Ethernet will eventually be used in veryhigh-bandwidth applications such as ADAS and autonomous driving,CAN networks won’t soon disappear. In places where CAN networks arechallenged by security requirements, GM will apply CAN FD (FlexibleData rate), which can support data rates up to six-times faster than CAN.GM employs Classic Autosar, particularly secure onboardcommunications (SecOC) modules, to detect attacks on the CANnetworks.

Cars have multiple wireless entry points that make them vulnerable tocyberattacks, including Bluetooth, DSRC, satellite, cellular and RFkeyless entry. “For both security and cost reasons, we want to minimizethese. Instead of having separate security modules at each entry point, theindustry is working toward having maybe one module with multiplecommunications capabilities,” said Mr. Tierney. He thinks the emergenceof 5G cellular may offer opportunities to consolidate the number of radiosembedded in a vehicle.

Global Industry CollaborationGeneral Motors sees cybersecurity not as an area of competitiveadvantage, but as a matter of public safety. A cyber incident is not aproblem just for the automaker involved, it is a problem for everycarmaker around the world. Other carmakers are buying into the premisethat cybersecurity is a collective endeavor. Major collaborations areunderway internationally.

� Founded in 2015, the Automotive Information Sharing and AnalysisCenter (Auto ISAC) has been operational since January 2016. Auto ISACmembers, which include all of the world’s major carmakers, aredeveloping a set of best practices. “Through that conversation OEMs areable to talk about what is working,” said Mr. Tierney. “GM can share itsperspective on how we have organized ourselves, some of the processeswe have implemented, things that have worked, things that haven’t and



4

things we are working to improve. Automakers do have varying levels ofimplementation, not everyone is at exactly the same place, but I thinkevery automaker understands the risks and is starting to react.”

� The United Nations Economic Commission for Europe (UNECE) taskforce on cybersecurity and software updates began its work in December2016, with the goal of developing guidance and recommendations by June2018. The task force, which is receiving broad international support,includes type approval and cybersecurity experts from the United States,Germany, Japan, France, South Korea and China, among other countries.

� The ISO/SAE effort, ISO-SAE 21434 Road Vehicles—CybersecurityEngineering, has been underway since October 2016. According to LisaBoran, vehicle cybersecurity manager at Ford and co-convenorrepresenting the SAE in the standards-making process, the group’s goal isto “develop a risk-based, process-driven approach to weavingcybersecurity into the entire product development lifecycle, from conceptto decommissioning. It is basically to provide a framework for managingrisk and building cybersecurity culture into the organizations.”

ISO-SAE 21434 will publish its standard in early 2020. The new standardwill complement, not replace, the ISO 26262 functional safety standard.The joint committee includes more than 100 participants representingsome 82 companies from 12 different nations.

“Our perspective has always been that cybersecurity regulations need tobe flexible, risk-based, allowing OEMs to come up with a strategy and beable to show their process,” cautioned Mr. Tierney. “Overly technical,one-size-fits all doesn’t make a lot of sense in cybersecurity where thingscan change rapidly.” �



5

Nvidia Bets Big on Self Driving

In the automotive section of Jensen Huang’s keynote presentation at thisyear’s GPU Technology Conference in San Jose, California, attended by8,500 developers, partners, customers, reporters, employees and analysts,myself among them, Nvidia’s rock-star CEO referred several times to the“massive investment” Nvidia is making to create the future of autonomousvehicles.

The company invested $2 billion over four years to develop Xavier, “theworld’s most complex system on chip ever created,” according to Nvidia.With more than nine billion transistors, the SoC delivers 30 trillion operationsper second, while consuming just 30 watts. Xavier will first be targeted at theautomotive market, possibly followed by others. First samples of the chiphave been available since Q1 2018.

From Xavier, Nvidia also created Pegasus, a four-chip, 300-watt, AIcomputing solution consisting of two Xaviers and two next-generation,discrete Volta GPUs. Capable of 320 trillion operations per second of deeplearning calculations, and the ability to run numerous neural networks at thesame time, Pegasus is designed for ASIL D functional safety certification.Production of both the Xavier chip and the four-chip solution will start beforethe end of 2018.

Several thousand engineers at Nvidia are working on autonomous vehicles;among them are the 1,500 people who label the data that is being collectedfrom Nvidia’s five autonomous test vehicles and a fleet of roughly 20 datacollection vehicles. In the tool used to train neural networks, the labelers drawbounding boxes around the cars, trucks, lanes, pedestrians, bicyclists andtraffic signs, all things that are crucial to self-driving, identifying each item.According to Jensen, who goes by his first name, 20 to 30 neural networkscould be operating in each autonomous vehicle. Nvidia hasn’t decided if itwill offer the networks it is developing as a product.

In his keynote, Jensen also talked about the role Nvidia can play inautonomous vehicle simulation. “We know how to build virtual realityworlds,” he said, as he introduced Nvidia DRIVE Constellation, a cloud-based system based on two different servers for testing autonomous vehicles.The first server runs DRIVE Sim, which generates photo-realistic datastreams to create a range of different testing environments. The second server



6

contains a DRIVE Pegasus AI car computer that runs the completeautonomous vehicle software stack and processes the simulated data as if itwere coming from the sensors of a car driving on the road. “We are going tohave thousands of Constellations,” declared Jensen. “These virtual worldswill be running simultaneously. With just 10,000 constellations we can coverthree billion miles a year.”

Thus far, Nvidia’s investment in autonomous driving simulation has beendevoted to hardware-in-the-loop testing of its DRIVE Pegasus platform. Thecompany has not yet decided what further role it will play in the market forsimulation tools.

Nvidia also announced that its complement of automotive partners had grownto 370 companies, from 320 last year. All the companies that have thus farbought an Nvidia DRIVE product for use in the vehicle or in the lab are onthis list, including carmakers, tier ones, sensor developers, HD mappingcompanies and researchers. The list includes 200 startups.

Long Wait for Autonomous Driving PayoffAfter sitting through Jensen’s keynote, I came away impressed by the sizeand the breadth of Nvidia’s investments in self-driving technology. Theproblem is it could take more than ten years for Nvidia’s massive investmentsin autonomous driving hardware and software to find mass market returns.Further, a detailed product roadmap to Nvidia’s automotive future that goesbeyond computing platforms with their associated SDKs may not yet exist.Will the company enter the tools business? What application software will itsell? Will it sell and maintain neural networks? What services will it offer?

In 2017, Nvidia’s series-production automotive business came almostexclusively from the sale of the computer platforms used in infotainmentsystems. Nvidia also supplies the chips that power the Tesla Autopilotsystem, but it doesn’t supply the software. Nvidia is no longer pursuinginfotainment business. “Infotainment has become commoditized,” said DannyShapiro, senior director of Nvidia’s automotive business.

In the near term, as the mass-market for in-vehicle self-driving platformsslowly takes shape, Nvidia will continue to win business from the many self-driving technology developers who are training neural networks, developingHD maps and simulation tools, and buying embedded equipment for testfleets. Some of those customers will engage Nvidia to provide engineeringservices.



7

Taking a step up from infotainment, Nvidia is participating in the market forhigh-end, AI-enabled cockpit computing platforms. The DRIVE IX hardwarewith its software development kit is capable of supporting multipleapplications including driver monitoring, 3D graphics, multiple displays andnatural language speech. The Mercedes-Benz User Experience (MBUX)infotainment system featured in the new A-Class is powered by an NvidiaDRIVE IX computing platform.

Among the many companies offering autonomous-driving computingplatforms, Nvidia seems to be in the lead. But the ramp-up to high-volumeembedded platform business will be a long time coming. First to come will beLevel 3 conditional automation on expressways. But as we are seeing withAudi’s piecemeal rollout of its Traffic Jam Pilot, it will take many months forthe world’s regulators to sort out the challenge of safely re-engaging aninattentive driver. The step up to mass-market Level 4 and Level 5implementations could take a decade or more. As Jensen said several times inhis GTC keynote, developing autonomous driving technology, and provingthat it is better than human driving, is hard to do. �

Nvidia Automotive Sales

2015 to 2018 CAGR: 45%Data: The Hansen Report and IDC

FY 2015 FY 2018

$183 million

$558 million



8

EXO Technologies Developing PrecisionGPS for Autonomous Cars

Established in Tel Aviv, Israel, in July 2015, EXO Technologies hasdemonstrated to a number of carmakers proof of concept of sub-10-centimeteraccuracy GPS, which unlike competing approaches requires no base stations.EXO Technologies was acquired by Lear Corporation in December 2017. Learhas been building a vehicle connectivity portfolio that includes gateway modules,V2X and over-the-air update technology. EXO GPS correction technology, whichrelies on a cellular link to the vehicle, aligns well with Lear’s connected vehiclestrategy.

EXO was developing its GNSS (global navigation satellite system) solution withthe goal of providing highly accurate GPS for autonomous cars, cell phones anddrones but quickly learned that demand was greatest from the automotiveindustry. GNSS is the generic term for navigation satellite constellations, whichinclude GPS (U.S.), Galileo (Europe), GLONASS (Russia) and BeiDou (China).

A number of companies have been developing precision GPS technologies suchas RTK (Real Time Kinematics) and PPP (Precise Point Positioning), but EXOfound these approaches inadequate. “Those technologies were developed forsurveying applications; they were never intended for mass-market use cases likedriving,” said Nuri Golan, the 31-year-old co-founder and former CEO of EXO.Mr. Golan is now director of vehicle positioning at EXO Technologies by LearCorporation.

RTK relies on base stations, physical towers with known locations that have beenprecisely surveyed. GPS receivers at each base station compute the differencebetween the ground truth and the GPS location and broadcast the correction to allthe GPS receivers nearby. “The problem is it doesn’t always work as well as itsounds,” explained Mr. Golan. “It is very dependent on where you are. Obviouslyit also requires that you have infrastructure. You need base stations to beeverywhere in the world in order to use this globally.”

While less reliant on base stations, the problem with PPP GPS receivers is theydon’t work in real time. “GPS satellites don’t actually know very well where theyare, and that leads to errors,” said Mr. Golan. “The PPP receiver has to gather dataover an extended period of time so it can calculate where the satellite startedfrom. After you wait 20 or 30 minutes you would then have good accuracy.”



9

Some of the companies that offer GPS correction based on RTK or PPP havemade very significant improvements in the technology, and their products arewell advanced from what was available even a few years ago, but the limitationsof the technologies persist. “RTK still requires infrastructure and expensivehardware,” said Mr. Golan. “Even if the cost of the hardware goes down overtime, you are still going to have costs associated with maintaining those networksof towers.”

EXO’s Instant Position Acquisition GPSInstead of putting physical towers on the ground to measure the error, EXOdecided to look at the sources of the error and figure out how to predict it ahead oftime. EXO developed models for the satellites, for the atomic clocks on thosesatellites, and for the atmosphere and troposphere. “That took several years, withsome of the world’s foremost experts on GPS on our team, to get to where we aretoday,” said Mr. Golan.

EXO intends to generate correction messages in the cloud and transmit them tothe vehicle fleet via cellular using either the RTCM standard message protocol ora different format if required by the OEM. It recommends that a correctionmessage be sent once a minute to the onboard GPS receiver. “The ability toaccept RTCM correction messages is a very common function that is going to beon most receivers,” Mr. Golan noted.

GPS positioning accuracy declines appreciably in cities, where buildings andwalls can block or reflect satellite signals. Because urban transportation is certainto be a major use case for autonomous vehicles, EXO intends to make deadreckoning using inertial measurement units part of its solution so the AVs canmaintain position accuracy. Vehicle-to-vehicle crash prevention use cases willalso require precise positioning accuracy.

Autonomous driving requires the use of high-definition maps that are accurate towithin 20 centimeters, or even to within 10 centimeters. Along with radar, cameraand lidar sensors, GPS is needed to precisely locate the vehicle in relation to themap.

“Sub-10-centimeter GPS will be a huge benefit for autonomous driving,” saidStephen O’Hara, principal research engineer for highly automated driving sensingand perception at HERE Technologies. “When you can directly sense theposition and orientation of your car on the road to that level, localizing the vehicleto the map is a lot easier. We are certainly going to show our OEM partners howthey can use more advanced GPS systems. Still, there will be places inside urbancanyons that won’t give you the GPS accuracy you want. In those cases you will



10

need the lidar, radar and camera sensor outputs fused with inertial sensors anddeep learning to establish the vehicle’s path plan.”

According to Mr. Golan, EXO’s technology has been validated, and the businessis working with Lear to productize it for sale to carmakers and tier ones. “Thereare a number of different ways this technology can be offered,” he said. “It can siton whatever hardware is already on the car, or we can provide our own hardware.Those are issues we are working on with customers right now. We are veryflexible in what we are going to offer.” No release date for the product has yetbeen announced. �



11

The Company Profile: KOSTAL Group

1,833 1,973 2,1462,358 2,364 2,470*

2012 2013 2014 2015 2016 2017

KOSTAL Group Revenue by Year2012 to 2017 CAGR: 6.2%

€ millions

*Plan

Thumbnail Sketch

2017 figures are per plan, not yet final.Headquarters: Lüdenscheid, Germany,https://www.kostal.com2017 Revenue: €2,470 millionR&D: 9.2%Employees: 17,915, of whom 81% workoutside GermanyRevenue per Employee: €137,8732017 Automotive Electrical SystemsRevenue: €2,139 millionAutomotive Products: Mechatronicmodules, switch panels, switches, ECUsOwnership: The company is owned by theKostal family.

KOSTAL Group Revenue by Division2017 Total: €2,470 million*

AutomotiveElectrical Systems,85.3%

Connectors, 12.0%Industrial Electronics,2.2%

SOMA Test Systems,0.5%

*PlanPercentages are based on total revenue, includingintergroup sales.

BackgroundThe company was founded in 1912 inLüdenscheid, Germany, by LeopoldKostal, and is still owned by the Kostalfamily today. Andreas Kostal, thefourth generation to lead the company,took over as chairman in 2011. One ofthe basic principles the Kostal familyasserts is: “The interests of KOSTALas a company have priority over theinterests of the Kostal family.” As afamily-owned operation, KOSTAL isnot constrained by shareholder pressurefor short term profits.

The initial product line includedsockets, plugs and switches forindustrial and domestic use. KOSTAL

https://www.kostal.com



12

1,542 1,688 1,8552,043 2,046 2,139

2012 2013 2014 2015 2016 2017*

KOSTAL Automotive Electrical SystemsRevenue by Year

2012 to 2017 CAGR: 6.8%

€ millions

*Plan

KOSTAL Automotive Electrical SystemsRevenue by Product

2017 Total: €2,139 million

Mechatronicmodules, 43%

Switchpanels/switches,39%

Electronic controlunits, 17%

Other, 1%

produced its first automotive part, a turnsignal switch, in 1926. One of thecompany’s mainstay products, steeringcolumn switches have been in productionfor more than 50 years. Today KOSTALclaims market leadership on steeringcolumn modules, which in addition tostandard components such as turnsignals, wiper switches and rotarycouplers, integrate electronics such assteering angle sensors, information fromcontrols mounted on the steering wheel,cruise control/limit switch and gearselector systems.

Since 1995, KOSTAL has beenorganized into four business units:Automotive Electrical Systems,Connectors, Industrial Electronics andSOMA Test Systems. By far the largestdivision, Automotive Electrical Systemsaccounted for 85% of sales in 2017.

Since 1965, KOSTAL’s revenue hasincreased every year with only twoexceptions: 2008 and 2009.The company competes most closelywith Valeo, Panasonic, Luxshare, Alps,Preh and Continental.

Core Products/Capabilities“A lot of the product areas where we are especially strong require an integration ofdifferent skills, from mechanics to software to electronics to HMI,” said HarryAsher, president and CEO of KOSTAL of America. “For example, we have a longhistory in switching, where we apply mechanics such as haptics, actuation and force.In our door control modules, we integrate one-touch window-lift systems with pinchprotection. It is not just a switching mechanism.” Dr. Asher explained that in order toimplement pinch protection, it is necessary to detect the position of the glass, thespeed of the glass, the forces between the glass and the window seal and be able to



13

KOSTAL Automotive ElectricalSystems Revenue by Region

2017 Total: €2,139 million

Europe,52%

Asia, 29%

Americas,19%

KOSTAL Automotive ElectricalSystems Revenue by Customer

2017 Total: €2,139 millionVolkswagen Group 26%Daimler 18%Ford 12%FCA 9%Great Wall 7%PSA Peugeot Citroën 5%Renault, Nissan, Mitsubishi 4%BMW 4%Tata, JLR 3%GM 3%Geely, Volvo 2%Honda 1%Mazda 1%Other 6%

reverse it if something unusual betweenthe glass and the seal is detected. Themotor control technology and softwareused for pinch protection is also applied toone-touch seat position controls.

The products below provide the bulk ofsales within KOSTAL’s mechatronicmodule, ECU and switch product lines.

� Steering Column ModulesKOSTAL is the market leader in steeringcolumn modules, the device that sitsbehind the steering wheel with stalkswitches for wipers and turn signals. Themodule can also include a KOSTAL-supplied steering angle sensor, needed asan input to the electronic stability controlsystem, for example, and other functionssuch as locking and immobilizer.

� Electronic ShiftersE-shifters, a mechatronic product thatselects park, reverse, neutral or drive,foregoes the mechanical linkage to thetransmission and instead shiftselectronically, typically via the CAN bus.KOSTAL E-shifters take a variety offorms. For BMW, KOSTAL makes a stalkshifter that looks like a mechanical shifter.KOSTAL has been producing E-shiftersfor BMW since 2005. Chrysler’s E-shifteris rotary, as are shifters used by Ford and Hyundai. Daimler’s and Tesla’s areimplemented as a stick-shift mounted on the steering column.

� SwitchesWithin KOSTAL’s extensive line of switch products, the top sellers are powerwindow, seat adjustment, headlamp and steering wheel switches. Switches can bemechanical or touch-sensitive and provide tactile and acoustic feedback. They areoften integrated with electronics for diagnostics and networking, and can includeillumination.



14

� Door Control ModulesThe modules include motor, switch and bus system integration for window controland door locking systems. The functionality included in these modules has expandedover time to include additional features, for example, global window close and mirrorcontrol. New vehicle architectures and concepts will add further functionality.

Fast Growing Products� Onboard ChargersOnboard chargers, used in battery electric and plug-in hybrid vehicles to convert ACvoltage from the electricity grid to high-voltage DC for the traction motor, are nowKOSTAL’s fastest growing product. Its first-generation charger, a 3.6-kilowatt unitbuilt for Volkswagen, was brought to series production in 2013. This year KOSTALwill begin shipping its third-generation charger to Volkswagen. In this more powerfulcharger KOSTAL had to fit 11 kilowatts of power into the same package size as itsfirst-generation 3.6-kilowatt unit. KOSTAL’s onboard charger product line nowincludes 3.6-, 7-, 11- and 22-kilowatt units.

KOSTAL’s most significant charger customer is the Volkswagen Group, includingVolkswagen, Audi and Porsche brands, which last fall announced its intention tomarket 80 new electric vehicles—30 plug-in hybrids and 50 battery EVs—by 2030.KOSTAL’s fourth-generation charger development is targeting mass-market seriesproduction by 2020. “Because this generation is targeted for a high volume market, itis designed for automated production and cost optimization,” said Juergen Schnitzler,KOSTAL’s product manager for power electronics.

KOSTAL has also developed some onboard chargers for three customers in China,where it has already established development, validation and production competence.As of the end of 2017, KOSTAL had delivered roughly a quarter-million onboardchargers. KOSTAL’s market for chargers is growing very quickly: by 2021 or 2022,KOSTAL expects to be shipping one million units per year.

KOSTAL also supplies charging gateways for the BMW i3 and i8. Usually part of thecharger, but in this case a separate component, the charging gateway handles thecommunication interface between the charging infrastructure and the vehicle. The i3was introduced in late 2013, followed by the i8 in 2014.

� DC/DC ConvertersWorking together with customers, KOSTAL has been developing some concepts forDC/DC converters, both stand-alone and integrated within the onboard charger.Carmakers, especially those developing large plug-in hybrid vehicles, have expressedinterest in integrating 12-, 48- and 400-volt conversion into the charger. “We areresponding now to RFQs and planning to start production soon,” said Mr. Schnitzler,



15

who suggested that customers would benefit from supply and technologysynergies from KOSTAL’s high-volume charger business.

Yanfeng-KOSTAL Smart Interior Surface PartnershipIn September 2017 at the Frankfurt Auto Show, Yanfeng Automotive Interiors(YFAI) and KOSTAL presented a center console module they jointlydeveloped to showcase what their strategic partnership could deliver. The demofeatured an LCD panel that is bonded to a curved glass surface. (See below.)

When OEMs start designing car interiors for autonomous vehicles, the twocompanies see an opportunity to convert large decorative surfaces inside thevehicle, including door trim, floor console and instrument panel, into smartsurfaces behind which touch-sensitive switches with active haptic feedback,displays and lighting would appear as needed and then disappear when inactive.“Yanfeng is an expert in trim and décor parts such as wood, leather and glass aswell as in interior structural elements, for example instrument panels, centerconsoles and door panels,” said Frank Blaesing, KOSTAL’s head ofinnovation. “KOSTAL brings our functional know-how in building andintegrating HMI components such as capacitive switches or displays into thevehicle.” Mr. Blaesing is responsible for developing the company’s productroadmaps, deciding what new functionalities will be introduced in coreproducts and what new products will be developed. Approximately 70engineers report to him.

The two companies have been talking with their customers about smartinteriors and are close to landing first contracts. YFAI is a joint venturebetween Yanfeng Automotive Trim Systems and Adient. Established in2015,Yanfeng is mostly comprised of the former Johnson Controls’ automotiveinteriors business. Adient was Johnson Controls’ spun-off automotive seatingbusiness.

YaKoMo (Yanfeng-KOSTAL-Module)Center console concept that integrates 3D glass and new HMI sensor and actuator technologies

Source: KOSTAL



16

Distinctions Claimed by KOSTAL� World market leader in steering column switches� Leading supplier of onboard chargers for BEVs and PHEVs� Leader in fusion of interior surfaces with touch-sensitive switching� Leader in development of high-value surface appearance technology (KOSTAL Skintech)� First market application of rain sensors� Invented pinch protection for window lift systems� Invented combination turn signal, high-beam switch

Innovation Strategy: Energy and Empathy Products“The end-user and his experience, the UX, is at the heart of our strategy, whichwe call ‘Shaping the new mobility HMI with Energy and Empathy,’” said Dr.Asher. KOSTAL’s innovation strategy takes two tracks: The Energy trackresponds to carmakers’ growing demand for power electronics as they ramp updevelopment and production of electric, hybrid and mild-hybrid vehicles.KOSTAL is already serving the mass market for onboard chargers and expects tosoon receive orders for DC/DC converters.

“The Empathy track is HMI, covering all of the products that are in direct contactwith drivers and passengers,” said Mr. Blaesing. “Switches are empathicproducts, for example, but there is more to come. The consumer of the future willbe used to commanding and using a world that has been individually shaped toserve his or her needs. The KOSTAL innovations focus is clearly directed toserve the customer’s expectations by merging our software and hardwarecompetencies and creating products to shape the future mobility HMI.”

��Touch Sensitive SwitchingFor at least a decade, KOSTAL has been transitioning from a company whoseHMI components are largely electromechanical to a company supporting a rangeof HMI functions with mechatronics and with software.

Automotive HMI requirements are shifting as carmakers develop increasinglevels of safety, ADAS and autonomous driving features. “HMI is changingdramatically and we have to change with it,” said Mr. Blaesing, who citedKOSTAL’s investment in capacitive switching technology as an example of thecompany’s transition from purely electromechanical switches to switches thatemploy mechatronics, in this case miniaturized mechatronics. Placed behind theswitch panel, capacitive switches require no opening in the panel’s surface. Whentheir illumination is switched off, they disappear behind the panel.

Finger pressure and position is sensed by changes in capacitance on the switchpanel’s surface. An electromagnetic actuator, similar to a miniature loud speaker



17

coil, moving a fraction of a millimeter in opposition to a stiff spring, providestactile feedback to indicate that the switch has been actuated. In the nextgeneration, to help drivers locate the right switch without activating the switchfunction, KOSTAL’s switches will come with force sensing to indicate whetherthe switch has been touched or pushed.

Interest in KOSTAL’s touch-sensitive capacitive switch technology is growing,especially in Europe. BMW mounts a KOSTAL-supplied capacitive switch panelbeside its gear shifter allowing the driver to shift between comfort, sport, eco andpro driving modes.

��Software-Defined and Display-Based HMI“In another transition, we are moving from mainly mechanically defined HMI tosoftware defined HMI,” noted Mr. Blaesing, “using touch screens and touchdisplays, but still employing our mechatronics-enabled tactile feedback andcontrol elements, such as overlapping rotary controls, along with a display.”

��Gear Shifter for L2 Autonomous DrivingAt the Frankfurt Auto Show last fall, KOSTAL demonstrated how the gear shiftercould be updated and adapted to support Level 2 autonomous driving, meaningwhen the vehicle system handles steering, acceleration and deceleration with theexpectation that the human driver performs all remaining aspects of the dynamicdriving task.

“Everybody today is searching for a good, intuitive HMI for the hand overbetween manual driving and semi-autonomous driving,” said Mr. Blaesing.KOSTAL built a demonstrator that showed how more functionality might beintegrated in the gear shifter, making it function more like a joystick. Mr.Blaesing explained: “As long as you have the steering wheel in your hands youare in manual mode, you are operating the car. The moment you release thesteering wheel and grab this iconic element in the center console [the gear shifter],the car switches over to semi-autonomous mode, and now you can use this controlelement to give commands to the car. Shift forward to increase speed, or shift tothe left or right to give the change-lane command. But the lane change maneuveris actually done by the car. Let’s call it maneuver-based driving.”

Instead of requiring the driver to keep his hands on the steering wheel, in thissemi-autonomous mode the driver would instead be able to keep his hand on thegear shifter in the center column, a more comfortable position. To shift back tomanual mode the driver would simply place his hands back on the steering wheel.



18

��L3 Driving Changes to the InteriorKOSTAL has been thinking deeply about how its products need to change inorder to support Level 3 automated driving. The main challenge of L3 is figuringout how to quickly reengage the driver in the driving task when the vehiclecontrol systems can no longer drive safely.

KOSTAL is a leading supplier of steering column modules, which, because theyare situated right in front of the driver, would be a good location for a camera tomonitor the driver. “We could offer the camera as an integral part of the steeringcolumn module,” said Mr. Blaesing. That module could also be designed toretract so it is out of the way when the vehicle is in self-driving mode.

Another tool for quickly reengaging the driver is the power seat. “Every car withL3 functionality will have to have an electric seat equipped with advancedmemory functionality so it is able to bring the seat from a relaxed positon to adriving position in four or five seconds,” according to Mr. Blaesing. “It will alsohave to comply with ASIL safety requirements.”

Software Expertise at KOSTALHalf of the engineers in Mr. Blaesing’s advanced engineering organization aresoftware engineers. They are needed because many of KOSTAL’s productsrequire software to connect to the vehicle’s CAN, LIN or FlexRay networks.Software engineers also work on algorithms for rain sensing, pinch protection,door control products and other products. “Soon software will be one of thebiggest parts of the development of our new products,” he predicted.

A deep learning team of about eight people at KOSTAL’s facility in Dortmund,Germany, have been working on driver monitoring applications, including gazedetection, drowsiness estimation and driver position. KOSTAL is leveraging itsdeep learning knowledge throughout the development organization and beyond.

Company Strengths� The KOSTAL family’s long term focus, backed by solid funding, makes thecompany a reliable and stable partner for its customers.

� Among its competitive distinctions, KOSTAL cites its vertical integration, forexample the company produces plastic and painted components in house and doeslaser etching. With in-house surface mount technology, it can populate its ownboards.



19

129 139164

188 191228

2012 2013 2014 2015 2016 2017*

�KOSTAL has a strong history of fueling growth by integrating new functionalityinto existing products, and in integrating different technologies, especiallymechanical functions and electronics.

� KOSTAL has a global manufacturing presence and is generously expandingthat presence with the construction of eight new manufacturing facilities, growththat it is funding itself.

KOSTAL’s Expanding Production FootprintNew plants are being built in these locations:

Ukraine 8,000m2

Czech Republic 10,000 m2

Macedonia 14,000 m2

Morocco 5,000 m2

Shanghai 37,000m2

Baoding, China 5,000 m2

India 8,000 m2

Mexico 7,500 m2

� KOSTAL’s R&D is continually growing in all regions, to total 1,400 R&Dengineers.

R&D Expenditures by Year

€ millions

2012 to 2017 CAGR: 12.1%

*Plan



20

Mechatronic ModulesSteering column modulesIntegrated steering column

modulesSteering column switchesSteering column adjust switches on

columnCruise control switches on columnSatellite switchesGear shifter on columnWiper switchesSteering angle sensorsRotary connectors/clock springsCenter console modulesMechatronic gear shifters

Driver AssistanceRain and light sensorsFragrance systemsDriver assistance cameras

Electronic Control UnitsAccess and authorization control

units (China only)Interior control unitsPower window unitsPower window switches with

integrated electronicsCentralized power window unitsSeat memory and control unitsPower application control unitsOnboard chargers for BEVs and

PHEVsCharge interface units for BEVs

and PHEVsDC/DC converters

Switch Panels/SwitchesRoof modulesIntegrated roof modulesSwitch panels in roofDome lampsSwitch panels: touch-sensitive

and classicFaceplatesHMI control center consolesIntegrated HMI center consolesSwitch panelsSteering wheel switchesPower window switchesSeat adjustment switchesLight switchesSingle switchesHazardParking brakeMirror adjustStart-stopCanopy top

KOSTAL Products

KOSTAL’s Automotive FacilitiesFacility Location EmployeesGermany: Ludenscheid, Dortmund, 3,466*Halver, Meinerzhagen, Sindelfingen,MunichUnited States: Troy, MI 418*Brazil: Sao Paulo, Cravinhos, Manaus 944Bulgaria: Sofia, Smolian, Pazardzhik 1,361China: Anting/Shanghai, Malu, Changchun, Guiyang 3,351*Czech Republic: Zdice 1,869*France: Guyancourt/Paris 15Great Britain: Goldthorpe 486*India: Velore 417Ireland: Abbeyfeale, Mallow 980Italy: Rivoli/Turino 18*Japan: Kawasaki City, Hiroshima 34*Morocco: Tangier 149Macedonia: Ohrid 113Mexico: Queretaro, Acambaro 2,264Spain: Sentmenat 1,070*South Korea: Seoul 27*Sweden: Gothenburg 8Ukraine: Pereyaslav-Khmelnytsky, Kyiv 919

*Includes all business areas, not only automotive



21

PwC on Myth vs. RealityIn a January 2018 advisory titled, “How to Overcome Five Myths That AreDistracting Your Auto Company,” London-based PwC flags five misconceptionsthat frequently surface as the automotive industry adapts to the rapidly changingmobility landscape. As traditional OEMs, tech giants, suppliers and startupsinvest billions in developing electric vehicles and autonomous driving platforms,the risk of not seeing sufficient return on that invested capital is significant. Thepotential rewards for the winners are also significant but, “the margin for errorremains thin,” cautions PwC. According to its analysis, the top ten OEMs in 2016saw a return on invested capital of only 6.6%, which equates to just over half thecost of capital.

Myth 1: “Electric vehicle sales will surge within the next few years.” The reality,says the report, is that while EV sales will begin growing steadily in 2025, theywill still only account for about 4% of new car sales in the U.S. by 2027. Themarkets in Europe and China will blossom a little sooner with the help oflegislation and government incentives.

Myth 2: “A landscape dominated by fully autonomous vehicles is on the nearhorizon.” PwC forecasts that AVs will account for less than 1% of new car salesin the U.S. by 2027. The recent fatal crash involving an autonomous Uber vehicleunder test likely moved that horizon even further out.

Myth 3: “The ride-sharing phenomenon will transform the industry and facilitatethe transition to the fully autonomous era.” Shared mobility services account foronly a sliver of the total passenger miles traveled in the U.S. In 2016 personalvehicles accounted for 96% of miles traveled. The remaining 4% includes rentalcars and public transportation, as well as ride hailing and car sharing. Urban areaswill see the most impact.

Myth 4: “Traditional OEMs and suppliers face an existential threat from newcompetitors.” PwC notes that mass producing vehicles is a difficult task with highbarriers to entry, which means OEMs hold a big advantage. While much of thetechnology expertise required to execute autonomous driving will come fromSilicon Valley, carmakers can access that technology through partnerships,acquisitions and joint ventures. For at least the next decade, makers of internalcombustion engine vehicles will hold their ground.



22

Myth 5: “Automakers can thwart the competition and bolster their revenue viadownstream vertical integration such as owning ride-sharing businesses orproviding connectivity service.” PwC rebuts that notion, predicting a downturn inglobal automotive sales in the next several years, and cautions, “A slowdown willnegatively affect revenue goals for downstream integration and put furtherpressure on industry returns.” �


table of contents - hansen report

Documents