New Delhi: German automotive parts maker ZF plans to invest around EUR 200 million and strategically consolidate its business to drive growth over the next decade as it looks to double down its focus on India, the company said on Tuesday. It also said a ‘Refresh India strategy’ which revolves around four key areas – readapt, reinforce, retain and restructure — and supports the strategic repositioning of the ZF brand identity in the country, will aid its growth plans.
A global leader in driveline and chassis technology, among others, ZF has been in India for more than five decades, operating through eight entities, two wholly-owned subsidiaries, five JV partners, along with 14 manufacturing locations as well as a technology centre in Hyderabad.
The company last year announced the successful completion of the WABCO acquisition. WABCO is a global supplier of primarily pneumatic braking control systems, technologies and services. Besides, it also supplies fleet operators with fleet management solutions and diagnostic tools among other services.
“ZF is doubling down its focus in India through a significant investment of around EUR 200 million and strategic consolidation of its business domains with renewed impetus to drive growth over the next decade,” the company said in a release.
“Despite the current severe situation regarding COVID-19 in India, the ZF Group strongly believes in the long-term growth potential of the region. Therefore, we are launching a refresh India four-point strategy,” said Holger Klein, ZF Member of the Board responsible for Asia Pacific and India, at ZF.
This includes an intensive plan to rapidly grow the company’s business in one of the largest automotive markets in the world, he added.
“We plan to invest around EUR 200 million in the next few years to aid this growth through product launches, manufacturing and engineering footprint expansions, hiring and other developments across all business domains,” he said.
ZF already enjoys a leading position across various technology solutions in automotive and non-automotive business segments, as a preferred partner of choice, it said.
In the commercial vehicle space, the acquisition of WABCO bolsters our manufacturing and engineering capabilities to increase the content per vehicle. In this next phase of growth, we will also continue to leverage India as a global sourcing hub across four areas: R&D, majorly focusing on software development, IT and digital innovation, manufacturing and material sourcing,” Klein emphasised.
The company said it is also well-positioned to shape the future e-mobility and next-generation technology in the Indian market through its global portfolio, adding that it is partnering with Mahindra Racing for Formula E, supplying silicon carbide-based power electronics alongside the electric motor and transmission.
This partnership heralds’ endless possibilities for the future introduction of such advanced technologies in the region as these technologies get tested under the harshest conditions, he added.
Stating that the journey of ZF Group in India has evolved significantly over the last few decades, it said the new and evolved brand identity of the group in the region will be accurately represented in this new phase through the Refresh India four-point strategy growth areas.
As part of this, through higher levels of localisation and a strong thrust on design-to-market solutions, ZF aims to introduce advanced global technological solutions at an affordable value for the Indian market, it said.
Also, India will become a global hub for worldwide requirements across R&D, IT and digital innovation, manufacturing and material sourcing.
Substantial progress has been made in the recent past to utilise the Indian supplier base for child part requirements for the various divisions, the company said, adding that ZF will continue to leverage India’s manufacturing capabilities by expanding its footprint in the country.
The group will set up a new manufacturing facility in Chennai along with plans to increase the utilisation of other facilities, it stated.
ZF Group has divested its shareholding interest of 49 per cent in Brakes India to meet the Anti-Trust guidelines of CCI, post the acquisition of WABCO.
Furthermore, ZF Group is a majority stakeholder of WABCO India and is undertaking the necessary next steps to ensure all regulatory guidelines are being adhered to. The integration of WABCO into the ZF Group is well underway and is expected to be completed by the end of the year as planned, said the release.
It also said the group will continue to unlock its innovation power in the region by investing in the overall development of its employees.
News source- Economic Times