French technology major, Dassault Systemes, seems to have stumbled upon a curiously untapped market in India — 3D Experience Solutions for automobile manufacturers.
The last few years have seen Dassault ink deals with auto makers like Ashok Leyland, Eicher Motors and Hero Motor Corp, to sell licensed 3D Experience Software to these companies.
The result: lesser product development costs, optimum production activity and a digital production process.
What Does 3D Experience Do?
In a nutshell, Dassault's 3D Experience software allows automakers to digitise the entire manufacturing process.
From virtual reality headsets that let design engineers experience a concept before it is real, to 3D simulations of manufacturing processes that allow quality-control staff to iron out kinks before kick-starting production, the new-age technology is changing the way automobile companies build vehicles.
Companies like Ashok Leyland are already reporting a small but significant reduction in product development costs.
"My estimate is that there is at least a 10 percent saving in product development costs," said Ashok Leyland's senior vice president (product development) N Saravanan, speaking to CNBC-TV18.
He added, "If you look at our R&D costs, it’s between 2 and 2.5 percent of our revenues. So, this is a 10 percent saving on that."
Earlier this week, Ashok Leyland extended its partnership with Dassault System, by upgrading its 3D experience software to a 'Global Validation, Proven Performance' module, which in the words of Dassault, will "enable Ashok Leyland to optimize vehicle quality and experience".
Simply put, this means Leyland will have the ability to manufacture vehicles on par with some of the auto majors on the world stage. Dassault, it seems, may well have leveled that playing field.
Only The Start
It isn't just A-list auto makers who are jumping on to the bandwagon. Even smaller automotive suppliers want in on the action and the big attraction is the huge potential to cut costs and improve productivity.
On Thursday, Dassault Systemes announced the inking of a similar deal with listed automotive component manufacturer, Sandhar Technologies.
In an exclusive chat with CNBC-TV18, Bernard Charles, chief executive officer, Dassault Systemes, said that contracts with a few more big auto-makers were in the company's deal pipeline.
"In one year, you will see us winning (contracts with) Tata Motors, and in two years, (another contract with) Tata Motors again, but for a bigger scope, and then, there's Mahindra & Mahindra too," said Charles.
He added, "Looking at this conservatively, just by accounting for sale of the software alone, we could potentially target a business of one billion dollars, in India."
While there are no set timelines for this target, Dassault Systemes is confident that given stiff competition in the sector, getting to the magic number will not be a problem.