DETROIT – This year’s SAE World Congress Experience marks a coming-out party of sorts for SEG Automotive, a new-old supplier spun out of Germany’s Robert Bosch.

SEG was formed in January when Zhengzhou Coal Mining Machinery Group (ZMJ) acquired Bosch’s entire starter/generator operations, a portfolio that dates as far back as 1914 and includes 16 facilities in 14 countries. The purchase was the second big move into the auto industry by the mining company, which also owns China-based parts conglomerate ASIMCO.

In selling, Bosch may have been looking to exit what it saw as a commoditized business sector, but SEG certainly doesn’t view its future that way.

“We’re in what I would call our second century of innovation,” says SEG Automotive North America President Jon Husby, who points out the company’s name stands for starters, electrification and generators, meaning SEG believes it will be in position to continue to play in an evolving automotive market.

The industry still is “looking for advances on the internal-combustion engine, and we’re (providing) that,” he says.

SEG’s biggest tech play is around a 48V mild-hybrid system it calls 48V BRM (Boost Recovery Machine), a technology developed under Bosch ownership.

Similar to offerings on the way from a handful of other suppliers, including Continental, Federal-Mogul Controlled Power, Delphi, Valeo and Mitsubishi Electric, SEG says its device will cut fuel consumption 15% on the European drive cycle.

In addition to a smooth start-stop operation, the system captures braking energy, stores it in a lithium-ion battery and then puts it to use in various ways to improve powertrain efficiency. That could include providing vehicle-launch assist, driving an electric supercharger to boost engine output or powering accessories to reduce engine load.

“We’re making a big bet for the future of electrification,” Husby tells WardsAuto here. “We’re very focused on our 48V technology, as well as new technologies that we will be coming to market with (around) electrification in the future.”

Jürgen Schneider, vice president-product management, says initial 48V BRM applications will be focused on large, luxury SUVs and sedans, because heavier vehicles can recuperate more energy during braking, maximizing the system’s efficiency gains. But ultimately the mild-hybrid technology will filter down to smaller models, particularly as European emissions standards tighten in 2025.

“Most of the premium brands are going in this 48V direction in Europe,” Schneider says.

The system’s available power will increase from 12 kW in the first-generation technology to 15 kW in a subsequent phase and then 20-25 kW, he says. That will require a boost in battery capacity from 10 amp-hours today to 20 amp-hours by 2021.

That’s when Schneider expects higher-voltage hybrids to begin to lose market appeal and the electrified-vehicle demand to be divvied up between less costly mild hybrids and more high-end, full battery-electric vehicles.

“Our assumption is (conventional) high-voltage hybrids will begin to disappear, because the costs are too high, and be replaced by the 48V mild hybrids,” Schneider says. “For ICE optimization, the 48V system is the best regarding cost-benefit.”

SEG forecasts 48V mild hybrids at nearly 40% of the North American market, 60% of European sales and 35% of deliveries in China by 2030.

The first SEG application is expected this year on a vehicle that will be sold in the major global markets, Husby says, declining to identify the customer. “That’s very exciting for us, because it is going to set the stage for doing more. It will continue to grow from there.”

Cost is hard to quantify, Schneider says, but he estimates it at about €500 ($620) on a component basis.

SEG also has an eye on expansion of the technology into the Class 8 commercial-vehicle sector, although Husby, who joined SEG in January from interiors supplier Harman, won’t hint at when that might be possible.

Stuttgart-based SEG’s revenues totaled €1.7 billion ($2.1 billion) last year. It employs 8,000 people worldwide and claims market leadership in stop/start applications, having sold nearly 30 million units globally to date.

“And that continues to grow,” Husby says, noting a big uptick in stop-start system demand in recent months from an initially reluctant U.S. market.

SEG’s North American operations account for about 10% of the company’s global revenue and employment. It has headquarters, sales and testing operations in Novi, MI, and a manufacturing plant in Lerma, Mexico.

“It’s an amazing facility,” he says of the Mexico operation that employs 600 workers and still has open capacity. “We’re continuing to add lines in.”

U.S. policy direction – including uncertainty around the future of NAFTA and the likely rollback of CAFE standards in the U.S. – would appear to present headwinds for SEG in North America, but Husby contends neither issue will slow momentum.

“The (CAFE) rollback (appears) inevitable,” he admits, but says it isn’t changing SEG’s focus on fuel-saving technologies or its business prospects. “You never know what’s going to happen with a change in administration…or what’s going to happen for 2025-2026, so we’re already continuing to place our bets on what that’s going to look like.”

As for NAFTA, Husby says the company is watching developments closely because more than 80% of SEG’s North American sales are derived from its Mexico plant.

“It will change how we look at our sourcing strategy, what we have to do from a manufacturing strategy,” he says. “We’re putting a huge push on localization initiatives for North America. What comes out of NAFTA may drive where we need to get those suppliers from. So, it’s one of the top five things that keeps me up at night.”

But Husby still likes SEG’s position.

“We’ve had great success in North America,” he says. “I’m inheriting a business here that has averaged over 30% growth for the last couple of years, and we’re on track to continue very strong growth here year over year in revenue. It’s been a very exciting, fast-paced time for us, but we’re not done.” @DavidZoia