Wednesday, June 17, 2009

Tata Elxsi sees R&D scope amidst auto sector downturn

The automobile sector may have screeched to a slower pace over the past year, but that sentiment does not seem to pervade tech companies operating in the automobile solutions development space.

Design solutions major Tata Elxsi is expecting a strong performance in the R&D solutions space in its automobile vertical as the amount of software going into automobiles continues its upward swing, triggered by a spurt in demand for increased efficiency and features.

According to Tata Elxsi vice president R Natarajan, the bullish sentiment of the company is based on the increasing push across the world for development of greener vehicles, and the fact that R&D related to car models of the future are not clouded by the present downturn in the industry.

"There are stricter emission norms for the automobile industry that is coming into play globally, more government funding for such projects, and an emphasis on increased safety norms. All of these mean increased work and revenues for tech solutions companies", Mr Natarajan said.

According to him, the government funding for the push for greener cars in the West would trickle down to India, considering that many of the auto majors now have their R&D work being done in Asian countries including India.

He said Tata Elxsi was working on several cutting edge tech developments like a smart wiper for cars that will self-adjust its speed based on rain sensors, for a Korean auto major, and a range of solutions for the aviation sector that deal with cockpit display, cabin lighting and door management among others.

Two of the company's key verticals - the automobile and aviation sectors - are feeling the brunt of the slowdown, but Mr Natarajan said the company's revenues "will not dip significantly", considering that R&D work was likely to increase given the demand for better safety and efficiency standards. Tata Elxsi had a net profit of Rs 58.16 crore for 2008-09, up from Rs 52.85 crore in the previous year.

Mr Natarajan said roughly 700 of the company's 3,500-odd technologists and engineers were based here, and that the company had ensured that it honoured its commitment to all those who were offered job positions.

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