New Delhi: German firm ZF expects to be a EUR 3 billion company in India by 2030 mainly supported by the growing domestic market and overseas operations, Holger Klein, ZF Member of the Board responsible for Asia Pacific and India, told ETAuto.
“We are aiming to establish India as a region with decision-making power to drive the business. In this process we want to achieve EUR 3 billion revenue from the Indian market, out of which EUR 2 billion will be from sourcing volumes,” Klein said.
The Pune-based ZF India currently accounts for 3%-5% of the Group’s turnover. ZF will integrate its commercial vehicle business with the recently-acquired Wabco into one division named Commercial Vehicle Systems which will be operational from January 1, 2022.
In India, the branding of Wabco will switch to ZF in January 2022, P Kaniappan, MD, Wabco India, said.
Last month, ZF, which is into driveline and chassis technology as well as active and passive safety, has announced an investment of about EUR 200 million in India and consolidation of its business domains here to drive growth in the next decade.
This investment is the company’s intensive medium-term plan to rapidly grow the business in the country and the investment will be directed to product launches, manufacturing and engineering footprint expansions, hiring and other developments across all business domains.
With the continued focus on transformation of mobility, ZF completed a EUR 7 billion acquisition of commercial vehicle technology company Wabco during an economically challenging environment last year. With this acquisition ZF has become the second largest auto supplier globally after Bosch.
“Wabco at present holds about 77% of the equity shares but as per the regulation, Wabco India can only hold a maximum of 75%. We are in the process of selling some of the shares to reach the required limit,” Kaniappan said.
On June 22, auto component maker Wabco India proposed to sell 5 lakh equity shares of a face value of INR 5 each representing 2.64% of the total issued and paid-up equity share capital of the company.
Beyond component manufacturing
ZF also sees software as a new field of business and plans to restructure itself as a system solution provider. Klein said that the software share in the vehicle will continue to increase, and more and more components will be equipped with sensors, the potential data sources.
“On the pure software side we started to sell 2 years ago to the first Chinese OEM, the vehicle motion control software in an ICE model and this is picking up fast. Though software is not yet sizable, it will become more and more a trend,” he added.
Suresh KV, country head, ZF India, believes that barring some structural components the rest of all components will be driven by electronics and software. “In the medium term, 80%-90% of cars will be driven by electronics, hardly any component will remain purely mechanical,” he said.
ZF has also developed the entire range of e-mobility ranging from engine, power electronics, inverter, reduction gear. Klein asserts that the development of such systems is reaching quite a sizable figure.
“Many OEMs till now prefer to pick and choose but If they take the complete system from us, we believe it can substantially increase the energy efficiency of their vehicles,” Suresh added.
At the beginning of 2021, ZF formed the new Electrified Powertrain Technology Division that combines conventional, hybrid and purely electric drive technologies for passenger cars.
The company wants to establish India as a manufacturing and service hub in the coming years. In the process ZF is also trying to consolidate its operations in the country and planning to take actions against the other companies using the same brand name that could mislead the public. One such company is ZF Steering Gear (India) Ltd. “When somebody is operating under your and perhaps not working with the same standards it might cause a risk. We definitely question the company from using the same name and might take some legal course, if required,” Klein asserted.