Arnd Franz, Chairman and CEO of the Mahle Group, says India is both a key market as well as a key operations centre for the German auto components major.
17 Mar 2025 | 1606 Views | By Darshan Nakhwa, Yukta Mudgal & Ketan Thakkar
India has emerged as a strong pillar in the global strategy of German automotive component major Mahle, as the company shifts its focus towards marketspecific growth. In an exclusive interview with Autocar Professional, Arnd Franz, Chairman and Chief Executive Officer of the Mahle Group, underscored India’s growing significance, citing its ...
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India has emerged as a strong pillar in the global strategy of German automotive component major Mahle, as the company shifts its focus towards marketspecific growth. In an exclusive interview with Autocar Professional, Arnd Franz, Chairman and Chief Executive Officer of the Mahle Group, underscored India’s growing significance, citing its dynamic automotive market, increasing demand for advanced vehicle technologies, and the country's evolving role as a global manufacturing hub.
Franz highlighted Mahle’s commitment to India by carving it out as a separate region within its global operations, signaling a stronger, more localised approach. “We will ensure from a global perspective that India will continue to receive the utmost attention. Many of the other markets have reduced their growth rates in many cases. (They) have a flat development. (But) India is still very dynamic,” he said. In the past, Mahle took a global approach to technology development. Now, the CEO of the German automotive component maker has adopted a market-specific approach, as the pace of transformation picks up.
Mahle expects its India business to grow in strong double digits in the coming years, outpacing the 8% annual growth rate recorded in the past. The CEO attributed this to innovation, increased market share, and enhanced system solutions that align with evolving customer needs. “We have built world-class development and manufacturing capabilities in India, making our operations highly efficient, productive, and competitive,” Franz noted.
India’s Role in Mahle’s Global Expansion
Mahle is looking beyond domestic demand, positioning India as an integral part of its global supply chain. “Our Indian plants have reached a level where they are fully competitive on product quality and process efficiency. While our current focus is largely on the domestic market, we see significant export potential. By 2030, we expect direct and indirect exports to contribute up to 20% of our India sales,” Franz revealed.
He also acknowledged India’s growing appeal as an alternative manufacturing destination amid shifting global geopolitical dynamics. “The global geopolitical situation comes with more export potential for India. We see this from customers outside of India who constantly interact with us, since we are also at a level where we produce world-class quality and technology in India," he further said.
Mahle offers a range of powertrain solutions for vehicles across segments. It has three major businesses–powertrain and charging, thermal and fluid systems, lifecycle, and mobility. The component maker has presence in North America, South America, Europe, Africa, and Asia. In Asia, India has been a significant growth driver for the company, where it has 11 production facilities.
India’s Strategic Advantage
While the global outlook on electric vehicles (EVs) has tempered in recent months, India remains a hotspot for electrification. Franz pointed out that Europe and North America have faced slow EV adoption due to high costs, infrastructure challenges, and policy uncertainty. “If you look at the global markets, we've been very disappointed with volumes in Europe and North America…We had a tremendous change in the penetration of electric vehicles, where everyone, the vehicle manufacturers and their supply base, have made large investments. (However) consumer purchases for electric vehicles were slow,” he said.
While India has seen an influx of new EV models from legacy and new manufacturers, however, he urged caution in assuming a uniform transition to electrification. “This has now become visible everywhere in Europe, and especially in China, where there has been a surge in hybrid vehicle sales. I think we also need to be careful in India to assume the right mix before creating capacity,” he added.
Over the last few years, many manufacturers from key markets have cut their growth forecast for EV sales, scaled back production, and delayed new launches. Factors such as high purchase costs, inadequate charging infrastructure, concerns over driving range, lack of affordable models in specific markets, and uncertainty around government policies have weighed on EV sales.
Not surprisingly, Europe’s largest car maker, Volkswagen, recently announced plans to bring a €20,000 EV to drive adoption. Most automakers are developing a multi-fuel product portfolio instead of relying on one technology. However, in India, the competition in the EV space has just intensified, with a slew of new models introduced by legacy players over the last few months set to expand the market multi-fold.
Still, the internal combustion engine has a long tail ahead. Mahle's CEO believes diversification is the way forward. The component maker will continue to invest in electrification, focusing on efficient electrical drives and intelligent charging systems. Subsequently, it will focus on its largest business, thermal management. The company will continue to serve its customers with components for increasingly sustainable internal combustion engines and is also working on components for hybrid vehicles. Franz believes this strategy is appreciated in India, so he thinks the envisioned growth rates are sustainable.
“From an electrification standpoint, the higher content [will come in the form of] thermal management, plus motors and charging, and from market growth perspective. I believe doubling Mahle's sales until 2030 will not be magic. And we have the capacity, the people, and the capabilities," Franz said.
A Multi-Fuel Pathway
Franz emphasised that the future of mobility is not limited to a single technology. He pointed out that India, with its varied transportation needs, must adopt a multifuel approach. For commercial vehicles, he sees bio-LNG (liquefied natural gas) as a promising solution for longhaul transport, with CNG (compressed natural gas) better suited for urban fleets. Mahle is also actively working on hydrogen-powered solutions, which could play a critical role in achieving net-zero emissions.
“We believe that bio-LNG (bio-liquefied natural gas) is a viable option for the long haul. Maybe CNG (compressed natural gas) for the city areas. Mahle is also working globally on the hydrogen application for long-haul heavy trucks. And there we have seen very encouraging results,” he said. “Hydrogen is an economical way to transport and store energy, and we are seeing encouraging results globally. However, infrastructure and production capacity need to scale up before hydrogen can become mainstream,” he explained.
The breakeven point for hydrogen in most regions is around five euros (approximately Rs 500 per kg). It is a viable option for fleet operators struggling with battery-electric trucks over long distances and heavy loads. He also highlighted India’s potential in solar energy integration. “India has significant insolation, making solar a strong business case for sustainable mobility,” he said.
India’s Diesel Challenge Meanwhile, even as companies continue to work on clean alternatives to fossil fuel-powered commercial vehicles, Franz maintains the need to find fuel types as efficient as diesel but fully sustainable simultaneously. “There's a lot of things happening with biodiesel. HVO100 is derived from waste.
Also, biodiesel with new formulations will be more effective and better suitable for high-pressure injection and the common rail diesel system,” he said. According to Franz, significant progress is happening in India on the gasoline side. “Diesel is still a way to go. It is close to zero renewable percentage, and that can go up. So, that's one of the things that we need to discuss with the stakeholders. How can we bring more sustainable diesel to the market as an alternative to bio-LNG, H2, and green H2? A large portion, normally 30%, of the transportation CO2 emissions is in the long haul... You don't want to risk the functionality of your transportation sector," he said.