Dave Shemmans, CEO of Ricardo PLC, keeps busy these days. He is overseeing a huge growth in business from China, where Ricardo is helping Chinese auto manufacturers develop engines capable of meeting stiff new emissions and fuel efficiency standards.
Ricardo, an engineering consulting firm based in the United Kingdom, also is expanding its business in Japan.
Shemmans, 39, spoke with Staff Reporter Alysha Webb about Chinese automakers, the difference between doing business in China and Japan, and the future of diesel engines.
The Chinese government is implementing strict emissions standards and is considering legislation to favor fuel-efficient cars. How has that helped Ricardo's business in China?
Legislation tends to drive our business quite significantly, not just on the passenger side but the commercial side as well. The interesting side of China is: What legislation do they adopt? With all the plans to export, they need to make engines to meet global emissions standards. I can't see China lagging world legislation for very long.
You have announced you're working with Shanghai Automotive Industry Corp. Are you working with other Chinese automakers to develop engines that can meet emissions standards in western Europe and the United States?
We are working with new Tigers (a name that refers to automakers such as Chery and Geely) and old Tigers (referring to companies such as SAIC). The kind of work we do for Chinese customers is leapfrog technology. It is the leading edge in hybrid technology, gas and diesel engines.
In the last two years, we have made a major push in this market, and now 14 percent of our $275 million annual revenue comes from China.
You just set up an office in Japan. How is the market different from China?
In China, you meet the customer and six months later you could be doing a major product. We have gotten to 14 percent of revenue from Japan, but in a step-by-step, incremental way.
Our Japan business has been little technology projects. (But) what we are finding in Japan now is Japanese car companies have been so successful, they (now) have a full lineup in gas, diesel and hybrid products. Their product development resource is insufficient to develop. We are in discussions now to outsource maybe a whole project rather than just a piece of it. The Japanese are looking at a large product offensive.
Ricardo has done a lot of work developing diesel engines. What is the future for diesel in North America?
We are working on diesel products for the North American market with many customers. I would expect the Japanese to be leading the race if the U.S. decides to go diesel. (Diesel) will be the next real development phase in North America.
You may e-mail Alysha Webb at [email protected]