AUTOMOTIVE E-SSENTIALS

An interview with Patrick Fruth: 2024 will be a challenging year

TÜV SÜD was able to grow in all business units in 2023. Patrick Fruth, CEO TÜV SÜD Division Mobility also sees opportunities for the new year, for example digitalization is creating completely new fields of activity.

Mr. Fruth, is the declining market or rather the significantly weaker market compared to previous years, also likely to be reflected in the testing sector?

P. Fruth: Yes, we are feeling the effects of the lack of new registrations in the covid year 2020. These vehicles are particularly lacking in the brand workshops this year for the first periodical technical inspection (PTI). We are also still far behind the figures for new registrations of used cars in 2021, even though more vehicles have changed the owner in 2023 than in 2022. These vehicles are generally sold with a new PTI. Overall, the PTI market in Germany has continued to grow due to the further increase in the average vehicle age.

Are your remarketing activities also likely to be affected by this?

P. Fruth: By remarketing, we mean taking back large quantities of vehicles from fleets such as company or rental cars and thus our services relating to damage and appraisals. This business is currently developing very positively and 2023 was a good year.

How did the business of the Mobility division develop in 2023 and what are your expectations for the coming year?

P. Fruth: Consolidated figures will not be available until the annual report will be published. But we can already say that 2023 was a good year for us. We have grown in all business areas and have thus increased global sales in the Mobility division to over one billion euros. 2024 will certainly be a challenging year due to the geopolitical and economic situation. But there are also opportunities.

Is there still potential for growth?

P. Fruth: We see opportunities for growth particularly in the international environment. In 2022, for example, we have opened our first two test centers in Slovakia. In Spain, we will continue to expand our test center network and in Germany we will expand our Auto-Partner organization. We also see further potential in the area of damage and valuation reports.

How do the drivers of the automotive industry influence your business, i.e. e-mobility, autonomous driving, digitalization?

P. Fruth: Engaging with new technologies even before they come onto the market is part of TÜV SÜD’s DNA. We have been involved in electromobility, for example, from the very beginning and have created a global network of testing laboratories for all necessary traction battery tests. This allows us to test directly where the batteries are produces. This keeps distances short, ensures fast processes and lower costs.

We have a similar approach to automated driving and digitalization. Since 2015, completely new departments have been created within TÜV SÜD for this purpose, initially as project teams and now as genuine business lines. We are involved in research projects such as Pegasus and VV methods to develop test and validation methods for autonomous driving systems.

With the AV permit, we have also put together a test package for active and passive vehicle safety, functional safety and safety in use as well as cybersecurity, so that OEMs and Tier 1/2 can safely put their automated development vehicles into test operation on public roads.

New business areas

What new areas of business are opening up?

P. Fruth: Digitalization in particular is creating entirely new fields of activity. Against the backdrop of the accelerated integration of software in vehicles, updates play a special role. Driving functions that have already been homologated must be re-homologated after an update if the changes are still relevant to homologation. It must be ensured that the system continues to function safely after the software update and that the homologation requirements are met. Together with six industry partners, such as Microsoft and Telekom, we therefore presented Digital Loop at the IAA Mobility 2023. Here the entire homologation process is shifted into virtual space.

Virtual homologation as a standard procedure will speed up the approval process and at the same time reduce the costs and time required for complex physical tests. Increased integration of virtualization and automated test procedures also guarantees more efficiency and precision in homologation.

Compliance with regulations also ensures customer confidence in virtual test procedures and strengthens the general acceptance of software-defined vehicles and autonomous vehicles overall. The feedback we have received from our customers and the authorities on our proposal has been very positive.

The topic of data is likely to play an even greater role in the future. How should the expected flood of data from rolling traffic be handled?

P. Fruth: Drivers must be able to rely on the security of their data. At the same time, however, authorized bodies must have access to the part that is relevant to them. This is why we have proposed the Data Trust Center, where we manage the data securely and in trust. We are working with various authorities, the TÜV SÜD association, companies and cooperations such as Catena X to implement this.

“In addition to official services such as general inspections, emissions tests and appraisals our customers increasingly want complete service packages for all aspects of the vehicle and the workshop operations.”

General inspection

How far along are you with the digitalization of your processes and services?

P. Fruth: The digitalization of the general inspection began with the introduction of the PTI adapter in 2015. Since then, it has been an integral part of the PTI. It enables communication with the vehicle electronics via the electronic vehicle interface and supports the measurement of dynamic driving parameters. In addition, we are working together with FSD on the further development of the PTI in order to implement modern vehicle concepts for digitalized and networking vehicles in the future and also the electrification of the drivetrain independently and in a standardized manner.

For this, we also need non-discriminatory, neutral access to safety-relevant vehicle data. We have already described our proposal of the homologation process above. We are already working with AI in our internal systems. For example, our mobile devices recognize the license plate number and provide error images via connected databases. In addition, our appointment process is completely digital. More than one million appointments have already been booked online 24/7 by our customers in 2023.

What services do you offer your dealerships and workshop customers in this area?

P. Fruth: In addition to official services such as the general inspection, emissions tests and assessments, our customers are increasingly asking for complete service packages for the vehicle and workshop operations. These are in particular damage and value appraisals, but also testing services for workshop equipment and consulting services.

The structural change in retail will continue. What are your offers for the ever-growing car dealership groups?

P. Fruth: We are already in a position to provide comprehensive support for the very large dealership groups throughout Germany. We also have interesting solutions for large groups in the area of claims management, for example.

Shortage of skilled workers

How are you responding to the dwindling availability of skilled workers?

P. Fruth: The decisive factor for our future growth is, of course, getting the necessary specialists for all areas. We are investing heavily in our recruiting process and our online presence on social media. Our channels on Facebook, Instagram, TikTok and YouTube are currently followed by more than 234,000 potential future employees. We also believe that a modern and diverse corporate culture not only keeps staff turnover rates low, but also attracts new and, above all, young employees in particular.

Are new working time models a solution?

P. Fruth: We are dealing with the entire spectrum of new topics in the area of human resources and this naturally includes working time models. However, it remains important for us as a service provider to offer our customers the best possible service.

Copyright: Autohaus
Interview: Ralph Meunzel