ZF Group's India region President Akash Passey believes India stands at the cusp of major growth, as long as the country remains conflict-free and geopolitically unencumbered.
13 Mar 2025 | 1928 Views | By Yukta Mudgal & Mayank Dhingra
Amid evolving market trends such as electrification, tier-1 auto component supplier ZF Group is looking to ride the India growth story by following a strategy of greater localisation. The group's India region president Akash Passey believes the next 5-7 years belong to India, and the company – with its safety ...
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Amid evolving market trends such as electrification, tier-1 auto component supplier ZF Group is looking to ride the India growth story by following a strategy of greater localisation. The group's India region president Akash Passey believes the next 5-7 years belong to India, and the company – with its safety solutions, electronics, and mobility systems – can play a key role in realising this potential.
With six decades of operations in India, the German auto component manufacturer has been delivering technology solutions and services to major OEMs in India. The company operates 18 manufacturing facilities, 10 technical centres, and employs around 16,000 people across the country, with its headquarters in Chakan, Pune. According to Passey, the company is committed to expanding locally sourced, engineered, manufactured, and validated products from its test track in Chennai.
Localisation efforts can begin on a smaller scale and eventually scale up to 100%, he added. ZF Group offers locally produced high-end technology products in India for various vehicle applications, including active and passive safety systems, steering, clutch, axle, and suspension components for commercial vehicles, as well as transmissions, steering, and axles for trucks and off-highway applications.
They also provide gearboxes for the wind turbine industry and powertrain, chassis, and safety components for the light vehicle sector. Passey said India is adopting newer technologies faster than other countries. "We observe a strong eagerness from OEMs, where they no longer approach global shows with a 'this will come in five years' mindset. Instead, they ask, 'Can we have the first prototype in three months?' This reflects the new India, and it’s where our customers, as well as companies like ZF as a supplier, become crucial.
We aim to partner, localise, and not just be the third or fourth supplier, but the number one supplier," he explained. One of the challenges in localising products is balancing cost and value. Passey said, "If there is demand and the customer sees the value we offer, we’re committed to localising and meeting local cost levels, which are key in India.
Once we achieve that, we’re fully onboard." One of ZF’s key focus areas is safety products, and while road accidents are reducing in other countries, India is seeing a rise. According to Akash Passey, localised safety technology and products – which are likely to be more accessible to ordinary consumers – should be a priority.
"Today, we have the resources and the latest highways being built across India, most of which are already operational. Our top priority is safety. If there’s a solution that is effective and can be localised in India, we are eager to adopt it," he said. Similarly, localisation can also help in meeting India’s dream of building a world class manufacturing base.
"I believe the next five to seven years belong to India as long as we can keep ourselves conflict-free and remain geopolitically [properly] aligned. India is not just important for us within its own borders, but also crucial for our ability to export more, offer advanced engineering solutions, and expand into various sectors and functions that are currently being handled elsewhere in the world," Passey said.
Indeed, the localisation drive by OEMs has already had a positive effect on India’s trade balance. In FY24, the auto components industry achieved a trade surplus of USD 300 million, compared to a deficit of USD 200 million in FY23. This was driven by a 5.5% increase in exports to USD 21.2 billion, while imports rose by only 3% to USD 20.9 billion.
The passenger vehicle segment accounts for 44% of India’s auto component industry revenue, followed by commercial vehicles (25%) and two-wheelers (19%). In FY24, the industry’s turnover reached Rs 6.14 lakh crore ( USD 74.1 billion), marking a 9.8% year-on-year growth, according to the Automotive Component Manufacturers Association of India (ACMA).