In April, GE Lighting announced the sale of its business in Europe, the Middle East, Africa and Turkey, as well as its Global Automotive business, to Tungsram Group. A 122-year-old Budapest, Hungary-based firm, Tungsram was founded in 1896 and is currently controlled by Joerg Bauer, a former GE executive with more than 20 years of multinational company experience. The company produces more than 6,000 products in numerous sectors, including automotive.
Tungsram’s automotive division has been successful in the world market for 60 years, both in the original equipment manufacturer (OEM) and aftermarket spaces. Today, Tungsram has a vertically integrated supply chain network with advanced capabilities around glass, ceramics, metal and plastic, combined with state-of-the-art quality systems, automation and smart factories. Moving forward, the company plans to invest significantly in LED solutions as the technology grows in popularity within the automotive market.
Bauer, president and CEO, had a chance to outline the future of the GE Lighting brand as well as his plans for product innovation during a one-on-one interview with Aftermarket Business Worldat the AAPEX Show in Las Vegas.
What is the market strategy going forward? What’s the time horizon on the switch over to the Tungsram brand from GE Lighting? Also, in terms of reach into the aftermarket, are you looking to reach into the service repair level, are you trying to reach out to distributors, or OEMs?
Generally speaking, 40 percent of our business is OEM business and 60 percent is aftermarket sales. What’s very important is that we don’t distinguish quality-wise. We don’t have two products; they are the same products. Whatever is built into the new car, the new Ford or whatever, can be bought in the repair shop, or in the filling station, or wherever they buy lamps for after-sales. We do B-to-B. In the last two days, we’ve met a range of people that basically cover all the channels that you’ve mentioned. We believe we have a good opportunity here to get momentum from the rebranding in North America. We are investing in logistics capabilities and fulfillment capabilities. We will invest in the brands. The feedback so far has been very, very good.
You see the new company as a lean, more agile business, correct?
As an example, looking at our indoor farming products. Typically when we would do a new product it would take like 12 months. We just did one in three weeks. That’s the kind of agility you need to have if you want to be able to compete with the Asians, because they do that well. It doesn’t have to be a perfect product after three weeks, but it’s a product you can bring to a customer and ask, “Is that what you need?” I think some people call it MVP – minimal, viable, product. That has to be our goal in weeks, or days, we have to come up with a product and expose it to the customer and say, “This is what we can do. Is that OK? Do you need something else?” That’s what I would call agile.
Do the changes impact your automotive lines, to allow you to do things that GE maybe wouldn’t do?
Any large company is constantly fighting against complexity. Complexity is killing the large companies. That means they would be laser focused on a few things and they wouldn’t look left or right. We have no limitations. It’s exciting.
How soon do you expect to transition from the GE Lighting brand to Tungsram?
We have a certain period of time, a transition period, when we can use both – GE Lighting and Tungsram, but it’s in our interest to shorten that as much as possible. I’d say a maximum of another 12 months and then we’d be fully “Tungsram.”
In parts of Europe, Tungsram is a well-known brand. During socialist times, there was a strong connection between Hungary and emerging countries. If you go to the Middle East, North Africa and some other places, they know Tungsram. They connect it to quality and good value for money. That’s what we have to do in the U.S., as well.
Let’s talk about innovation. What are your plans for product innovation moving forward?
We still have the ambition to have all products in automotive lighting and general lighting. That’s what I call the Tungsram core. We are filling the gaps on some products, for example, automotive LED. We are pushing very deep into smart…smart everything. The beta doesn’t care if it’s a car, or it’s a plant, or a hospital. There’s a lot of synergies. If you set it up properly, you’ll have a lot of synergies behind the scenes, and then you can actually compete with the bigger companies. If we do the same thing as the bigger companies do, we have no way to win. We have to be smarter and more agile.
GE Lighting is a great company. I worked there for 10 years. We will never say anything bad about GE. They just didn’t have the same focus anymore on lighting that they used to have in the past. I think that’s the biggest differentiator now. We are really focused on that business. Automotive lighting is a very important division, and within that, North America is our biggest market.
We’re doing more and more LED lighting, because obviously that’s what the market is looking for. When you move to LED, you also have the opportunity to decide to put in what we call smart ready lamps. What we mean is for the same cost, if you plan it properly, you can get lamps with wireless connectivity built in, that have a USB plug where you can have sensors, cameras, microphones collecting data at the end of the day. As a result of the wireless connectivity, you end up having a meshed network where the lamps communicate with each other, and then you can connect the elements of a smart city to it.
Do those products exist now, or are there plans to have them in the future?
We have different levels of smartness. For example, the first level would be that you can dim the lamps automatically. So if no one is around, the lamp goes down to say 20 percent (illumination). If someone comes with a bicycle, it goes up to 100 percent. And then it goes all the way to a lamp that is online, fully configurated and basically it’s the platform to collect data that helps the city be a more livable place. Cities are getting bigger and bigger, in emerging countries particularly, and you can use the data to reduce operating costs in a city, for example, but it’s the same for a building, or a factory, or a hospital.
How does the automotive industry get impacted by smart technologies?
For automotive it’s the same concept. The cars are like a meshed network, and they communicate with each other from one car to the next car to the next car. We are looking to provide real time information from the street lighting, for example, to the car, or to companies like Waze or Google or others. Where, for example, we can see that the road is icy, slippery here; there’s a big pothole; there was an accident just now; that road is being blocked by a rubbish removal vehicle, so take the next (road)….these kinds of things.
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