“Increasing data volumes and a higher proportion of software in cars require extensive changes to vehicle architectures. This requires significant upfront investment and a clear roadmap”
Kishor Patil (on the left), Co-founder, CEO and Managing Director of KPIT. On the right in the picture: Gabriel Seiberth, President & Europe Head at KPIT

What challenges are the automotive and mobility industry currently facing?

Kishor Patil: The automotive industry is currently undergoing multiple changes. These changes present both challenges and opportunities, depending on each company’s approach. One significant aspect is the push towards achieving better emission standards for vehicles. This involves ensuring compliance while considering how to make vehicles more affordable. While there are incentives available in some regions, ensuring long-term sustainability without solely relying on incentives is crucial. Moreover, companies must strategize on how to compete effectively, especially against cost-effective competitors from China.

Another important aspect is the overall changes happening within vehicles, particularly in terms of software integration. This includes software required for advancements in autonomy and electrification. Vehicles are evolving to not only incorporate advanced features but also interact more seamlessly with the external environment. Consequently, there’s a significant increase in the data and software content within cars, necessitating substantial changes in vehicle architecture.

This signifies a substantial upfront investment in terms of re-architecting the vehicle and implementing new software. There are notable costs associated with these changes, including the development of new plans and strategies to adapt to evolving technologies. The main reason why the industry is grappling with considerable expenses. However, the challenge lies in making these investments financially sustainable over time.

What can KPIT do to address those challenges?

Kishor Patil: KPIT is thinking ahead of the industry curve. We work closely with many of our clients in trusted relationships, which gives us insight into their needs. However, as specialists in software integration, our role is to anticipate potential issues proactively and resolve them. We strive not only to make our clients aware of these challenges but also to provide a path forward. This proactive approach is a crucial aspect of our work.

So, from that perspective, I believe that KPIT’s approach revolves around addressing architectural concerns first. We focus on how to introduce and validate new architectures early on, aiming to reduce vehicle development time through revised validation processes. By making these processes more proactive, we’ve developed what we call the “blueprint solution”. This tool enables companies to anticipate potential delays and, more importantly, ensures the dependability of their systems. In terms of other programs, particularly from a driving automation perspective, KPIT has been deeply involved in numerous production programs for autonomous vehicles on a global scale. Our advantage lies in our global presence, allowing us to participate in projects across the US, Europe, and Asia.

Transitioning to electric vehicle (EV) programs, our primary objective is to facilitate more efficient EV solutions while concurrently driving cost reductions. This involves a comprehensive approach encompassing both software and hardware optimization.

It has been four years since you last spoke with Automobil-Elektronik. What has changed for you since then, especially in Europe?

Kishor Patil: We’ve become a completely different company since then. We take pride in our unique approach across various aspects, from client engagement to technological prowess, and even our organizational structure and scale. Specifically, within Europe, our Munich office serves as our European headquarters, a pivotal hub that facilitates our operations across the continent. With additional facilities in close proximity, we’ve cultivated a diverse workforce comprising individuals from over 25 different countries. This diverse talent pool empowers us to develop key technologies seamlessly, fostering an environment of innovation and collaboration.

The growth trajectory of our European presence is remarkable. From a workforce of around 500 to 600 employees not too long ago, we’ve now surpassed the 2,000 mark. This expansion reflects our commitment to enhancing our capabilities and better serving our clients. Moreover, on a global scale, our company has experienced substantial growth, evolving from less than 5,000 employees to over 13,000 worldwide. These numbers underscore our dedication to expanding our reach and solidifying our position as a leader in the industry.

We will be investing in a Global Software Engineering Centre in China. The centre will accelerate innovation, reduce time to market and bring in cost efficiencies. This will help global mobility OEMs for their operations in China and around the globe.

Another notable addition is N-Dream, a Swiss-based casual gaming company in which we’ve secured a minority stake. Our involvement here is purely investment-oriented. Furthermore, Technica has played a pivotal role in enhancing our architectural capabilities, allowing us to deliver comprehensive solutions across the spectrum. Through strategic partnerships and collaborations, we’ve bolstered our presence and fortified our position as leaders in the industry.

Mr. Seiberth, you are the head of Europe at KPIT since last November. So tell us a little bit about you.

Gabriel Seiberth: Having spent 25 years in the IT and consulting industry, I have witnessed profound changes and evolutions. My career began at Siemens Information & Communications, which had taken over the mainframe pioneer Nixdorf Computers. Over the years, the industry took a significant shift from mainframe computing to edge computing, where products have become increasingly intelligent. My personal development reflected that development. And thus, joining KPIT was a natural progression for me.

Moreover, the evolution of business models has been striking. Initially focused on implementing and consulting on back-office processes, the industry has now transitioned to partnering in core business operations. What was once merely digitizing support processes has evolved into computerizing entire products, placing IT at the forefront of our clients core operations.
This transformation has always fascinated me. Nicholas Carr’s article, “IT Doesn’t Matter-,” left a lasting impression on me. While his arguments were compelling, I found myself deeply intrigued by both its validity and its limitations. In my view, IT does matter—immensely. It’s not merely an enabler; it’s become integral to the very essence of modern business operations and thus inherently strategic.

At KPIT, we embody this belief wholeheartedly. We don’t just provide software solutions; we enable the business for our clients. Our role has evolved beyond advising and implementing; we are now indispensable partners, driving technological innovation at the core of our client’s operations. This progression aligns perfectly with my career journey—from my tenure at Siemens to my time at Accenture and now with KPIT. Throughout, my goal has remained consistent: to bring technology closer to the heart of our clients businesses, where its impact is most profound and transformative.

Which growth potential do you see for KPIT, especially in Germany and in Europe?

Gabriel Seiberth: We’ve forged several global strategic partnerships where we serve as the primary software development partner for our clients, such as Honda and Renault.

In Europe alone, we serve a multitude of significant automotive clients, contributing to our immediate next goal of generating $1 billion in revenue from our 25 automotive partners. While our strategic partnerships with BMW, Renault and Honda set a precedent, our aim is to replicate similar collaborations with industry giants such as Volkswagen, Stellantis and Mercedes-Benz.

We’ve strategically positioned ourselves in the ePowertrain sector, focusing on electrification and autonomous driving, but imagine the breadth of opportunities awaiting us in other car domains and general middleware architecture. Not to mention the plethora of methods and tools that demand attention. Our European clients are in need of assistance, especially given the significant shifts Kishor mentioned before.

Just four years ago, there was widespread concern about tech giants disrupting the automotive industry, relegating OEMs to mere hardware suppliers for companies like Apple. However, this narrative has evolved. The anticipated straightforward path to higher levels of autonomy has proven elusive, with AI systems grappling with novel situations beyond their training sets.

Let’s talk about the software-defined vehicle. How can KPIT help to make it reality for its clients?

Gabriel Seiberth: First and foremost, what’s typically referred to as the operating system in a car isn’t a single entity; Currently, it encompasses around 30 different operating systems collaborating. While there may be consolidation in the future, it’s unlikely to converge into a singular system. OEMs have grasped this concept, as exemplified by BMW and Mercedes, who aptly describe their OS as an architecture rather than mere software. It serves as a framework, delineating boundaries within which external innovations can flourish—a perspective we endorse.

This architectural approach must be meticulously crafted to accommodate seamless updates, optimal performance, and robust data handling capabilities. Automotive data generation surpasses that of most other industries, necessitating an architecture designed around this data-centric paradigm. The car’s network forms the cornerstone, around which various software layers are structured.

Contrary to the notion of a “smartphone on wheels” with one centralized electronic control unit (ECU), we advocate for a strategy centered around software reuse. Leveraging software from diverse sources—proprietary, legacy, and open-source—enables efficiency and flexibility. Our expertise lies in crafting secure, reliable architectures conductive to such reuse, fostering continuous evolution.

Looking ahead, the next decade will witness substantial innovation across various domains, including infotainment, powertrain, body, and chassis.

How do you assess cybersecurity as vehicles become more and more connected?

Gabriel Seiberth: The modern automobile, while offering unprecedented convenience and connectivity,  presents  critical vulnerabilities. Headlines often highlight the alarming potential for hackers to gain access to vehicles, steering them off course or even seizing strategic control. Such threats extend beyond mere inconvenience, posing grave risks to public safety—consider instances where cars have been weaponized in terrorist attacks.

In response, our approach to automotive security revolves around a fundamental principle: security by design. This entails embedding security measures into the very fabric of vehicle architecture, starting from the foundational network infrastructure. By prioritizing security at the outset, we mitigate the risk of vulnerabilities emerging at critical interfaces.

Ultimately, our commitment to security and safety underscores our core principle: every aspect of automotive technology—from the network to the software—must be centrally architected and engineered with the utmost diligence and foresight.

What is the turnover of KPIT globally and in Europe today?

Kishor Patil: As I mentioned earlier, our team now comprises over 13,000 individuals worldwide. It’s noteworthy to highlight that maintaining a similar number of on-site personnel solely in Europe typically results in significantly higher turnover rates while turnover in best-cost countries remains comparatively lower. In the past year alone, we achieved an impressive growth rate of 40%, with our revenues nearing the $600 million mark. Looking ahead, we anticipate further expansion, aiming to become a billion-dollar company within the next few years. Our focus remains steadfast on automotive mobility and software, areas where we continue to excel and innovate.

What are the expansion plans, especially in Europe?

Gabriel Seiberth: Certainly, our strategic focus on cultivating strong relationships with a select group of global clients underscores the importance of having the right talent and capabilities to support our ambitions. We actively seek to acquire top talent from the market and continually assess opportunities in the mergers and acquisitions landscape to enhance our technological prowess, deepen client engagement, and accelerate implementation efforts.

In line with this strategy, we recognize the vast potential that Europe holds as a key growth market for us. With untapped opportunities abound and a growing demand for our services among European clients, we are poised to capitalize on this potential. Kishor’s vision of reaching a billion-dollar milestone in the coming years reflects not just ambition, but a tangible opportunity that awaits us in Europe.

Mr. Patil, last year you were one of the speakers at the Automobil-Elektronik Congress. Tell us a little bit about that experience.

The platform offers a remarkable opportunity for industry leaders, especially those deeply entrenched in the engineering realm, to come together and engage in meaningful discussions. What truly sets it apart is the open and collaborative environment it fosters, both within the conference halls and outside them. This allows for invaluable exchanges of ideas and perspectives, paving the way for innovative solutions and approaches.

Furthermore, being part of such a prestigious event provides unparalleled insights into the latest developments and trends shaping the automotive and mobility landscape. As a company specializing in software integration and global integration, it was particularly enlightening for us to share our experiences and perspectives on the transformative role of software in the industry. Our goal was to contribute to the ongoing dialogue and offer fresh insights that could potentially drive positive change and innovation.