Toyota's hybrid focus not a problem for Denso, electrification boss says

Denso's electrification director for Europe, Ulrich Schwarz, does not believe the supplier's close ties with Toyota, which is Denso's largest shareholder and a big believer in hybrids, stalled its efforts to develop solutions for full electric cars. He explains why in an interview with Automotive News Europe Managing Editor Douglas A. Bolduc.

Did Denso's close ties with Toyota make the company late to move into full electrification because your biggest shareholder was more focused on hybrids?

I don't think we are late. We are working on technology that can either be used in hybrids or battery-electric vehicles. Toyota was using the majority of these components for hybrids, but Denso's technology is scalable, which means it can be applied to any kind of electrified car. That being said, we are not just following Toyota. We provide our technology to all customers at different levels of electrification. This location [Denso's 15-year-old Aachen Engineering Center in Wegberg, Germany] was founded to establish ties with the European automotive community.  

What is the biggest challenge that you and your team currently face?

Our daily challenge is to make sure we make strategic choices. We don't just follow our customers blindly. We analyze the markets, the different technologies and the business opportunities available to identify the win-win for Denso and the chosen customer. That requires deep strategic thinking.

Could you give an example?

Sometimes we try to guide our customers a little because we have proven technology. For instance, we might say, "Why don't you consider using our inverter to help reduce the costs?" But, of course, we are flexible. Ultimately, we want to have a sustainable business. Part of our strategy is to try to find the best spots for our products. We have a lot of technology they want, whether that is for a full hybrid, plug-in hybrid, full-electric vehicle or fuel-cell car, because our products are modular and scalable.

Which of your products give you the greatest hope for the future?

My answer is very simple: all of them. Electric motors, inverters and battery management systems will be needed by everyone. It's unlikely every customer will buy all three from us, but we will continue to push our products in parallel.

Denso's own data shows you have a global market share of more than 30 percent for inverters and battery management systems. Do you expect to boost share in those sectors or is the goal to maintain your lead?

Based on our history and our experience in these sectors we have a very good chance to increase our market share.  

Does Denso need to fill in any white spaces when it comes to the products it offers in Europe?

We are happy with our portfolio, however, we want to offer more than a single component or subsystem. We want to be a systems supplier. That's why we formed a joint venture company [BluE Nexus] with [Japanese transmission supplier] Aisin AW to develop and sell drive modules used for hybrid and electric vehicles. We provide the inverter for the system. We are also collaborating more with our thermal division. We believe doing this will benefit the customer because the components will be optimized to work together.

Denso is relatively unknown to people in Europe. What is being done to change that?

We are not very well known by the public but the automotive industry knows Denso extremely well. We are not lacking in RFQs [requests for quotations]. We are discussing plenty of business opportunities with automakers in Europe.