TREATING INDIA AS GLOBAL MANUFACTURING HUB
In a round table discussion of ZF leadership, Dr Peter Laier, Member of the ZF Group Board of Management, and Head of Commercial Vehicle Solutions and Industrial Technology, P Kaniappan, Managing Director, ZF Commercial Vehicle Control Systems India Ltd. and Akash Passey, President, ZF Group India stressed on India’s growing market potential. Richa Tyagi highlights the focus on localisation strategies with technological advancements made by the tier1 supplier.
Q. How does ZF regard India as a market?
A. Dr Peter Laier: India holds an important position for ZF in many aspects. First, we see India as a growing market with a growing middle class and a thriving automotive industry. This provides us with ample opportunities to serve the Indian market with products tailored to specific needs. Secondly, India serves as an important R&D location for us because of its skilled workforce and engineering talent. We not only develop products for the Indian market but also leverage India’s capabilities to meet our
India has emerged as a manufacturing hub not only for the domestic market but also for global exports.
global needs. Third, India has emerged as a manufacturing hub not only for the domestic market but also for global exports.
Could you shed some light on the recent growth trends in the Indian market?
P Kaniappan: The commercial vehicle sector has seen some changes in the Indian market, especially post-Covid-19. There has been a shift towards electrification, focusing on sectors such as buses and tippers. Additionally, government initiatives have accelerated growth, such as regulations governing the adoption of security technology. Commercial vehicles are being upgraded to international standards, presenting growth opportunities for us with advanced technologies.
Government regulations mandate a requirement of 50 per cent localisation for tender programs or under the FAME initiative, which we adhere to.
Q. What is ZF’s strategy regarding localisation and aftermarket services in India?
A. P Kaniappan: ZF aims to gradually increase the localisation of components, complying with government regulations while ensuring high-quality standards. Localisation of components varies among our products. For mechanical systems like ABS in our trucks, we aim to attain 85 per cent local components. However, in our latest EV products, we remain largely dependent on imports initially. We typically start with a local component percentage of around 20-30 per cent, gradually increasing it as needed. Government regulations mandate a requirement of 50 per cent localisation for tender programs or under the FAME initiative, which we adhere to. Additionally, as we scale, we also localise faster. The company is strengthening its aftermarket services through digital solutions and partnerships with distributors and dealers, focusing on improving uptime and providing advanced telematics services.
Q. How does ZF see the Indian market compared to China in terms of technological advancement and market potential?
A. Dr Peter Laier: The Chinese market has seen rapid technological advancements over the past few years, ranging from safety technology to powertrains and zero-emission vehicles. These advancements have significantly enhanced driver comfort and brought the vehicles up to international standards. Automated Manual Transmission (AMT) and Electronic Stability Control (ESC), to name a few technologies, are seeing huge growth in China. We believe that India will also follow the same path. Government regulations, coupled with increasing demand for comfort and efficiency, especially for longhaul trucks, suggest a clear direction towards the adoption of advanced technologies in the Indian automotive industry. And I believe Indian OEMs are moving towards an exportoriented strategy for a better future.
Q. Are you looking at passenger cars as the next big focus area above and
There are a lot of opportunities for us in the car segment with higher sales of SUVs over the last two years and more regulations being implemented by the government.
beyond commercial vehicles?
A. Aakash Passey: We already have a strong market share in the commercial vehicle segment. Now the maximum focus is on the passenger car segment. There are a lot of opportunities for us in the car sector with higher sales of SUVs over the last two years and more regulations being implemented by the government.