Nexteer looks to North Africa to help it better serve Europe

Herve Boyer: "Morocco will serve southwest Europe. It is ideally positioned for that."

Herve Boyer is leading Nexteer's push into the fast-growing Moroccan market. The steering specialist will start operations in the North African country next year and expects production to increase rapidly. He explained why and provided perspective on the future for steer-by-wire solutions in an interview with Automotive News Europe Correspondent Nick Gibbs.

What percentage of Nexteer's global revenue is earned in Europe?

In 2016, it was 11 percent. It was up in 2017 and this will keep increasing over the coming years. We're going to diversify a bit [into making half-shafts] but today electric power steering accounts for almost 95 percent of our revenue in Europe.

What are your current growth ambitions for Europe?

From 2015 to 2020 we’re going to double revenue in Europe. We've already sourced business that’s under development. We have increased our capabilities here. The epicenter of our engineering used to be in Saginaw, Michigan, but to support the growth [in Europe] we had to do more and more locally.

You're building a new plant in Morocco. What capacity will that add?

We have two plants in Poland and now we are diversifying with a plant in Morocco that will start operations in 2019. It gives us better geographical coverage. Poland addresses northeastern Europe, Morocco will serve southwest Europe. It is ideally positioned for that. We build more than 2 million electric power steering racks a year, and in Morocco we will have capacity for another 700,000 by 2020.

You work with Fiat Chrysler, PSA Group and BMW Group in Europe. What would it take to bring the Volkswagen Group on board?

Our biggest business right now is with BMW. That's a starting point. We are on a journey to become global. Europe remains the global hub of programs for global automakers. Right now, premium and more mainstream automakers are assessing our products and even a bit more.

You're developing steer-by-wire systems to work with autonomous and semi-autonomous cars. How big could this get for you?

This could be a big change. We can foresee it accounting for 30 to 50 percent of the electric power steering market by 2030. The plan is to enter production by 2022-23. That's based on customer predictions. We are in advanced development with several automakers in Europe and North America. At least three out of the biggest 10 global automakers are evaluating our solution with the objective of putting it into production as soon as possible.

When do you expect the steering wheel to disappear?

It will depend on the level of autonomy and regulations, but we all believe Level 4 will be on the market by 2025 and will become a major trend.

You've worked for European suppliers before. You're working for Chinese owners now. How do they compare?

I don't know if the change is coming from the ownership or the size of the company, but our Chinese ownership is extremely supportive of any kind of business opportunities. I think they show entrepreneurship, agility and speedy decision-making, which is helping us gain business. For example, when evaluating a case, we can be extremely quick to make a decision. Morocco is one instance. The time it took between evaluating and going forward was a matter of weeks and not months. I think this is one of the strengths of the organization and one that is appreciated by our customers.

You can reach Nick Gibbs at ngibbs@crain.com.