The German Tier-1 major is betting big on the growth opportunity from the Indian market and aims to accelerate its market share in the country in the coming years.
03 Oct 2024 | 804 Views | By Mayank Dhingra
With rising consumer awareness and regulatory push, passive safety systems such as airbags and seatbelts in cars have seen a significant growth in the recent past in India, thus pushing technology providers like Germany’s ZF Lifetec to target more localisation and offer cost-effective solutions to OEMs in the country.
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With rising consumer awareness and regulatory push, passive safety systems such as airbags and seatbelts in cars have seen a significant growth in the recent past in India, thus pushing technology providers like Germany’s ZF Lifetec to target more localisation and offer cost-effective solutions to OEMs in the country.
On September 12, ZF Lifetec commissioned a new competency centre in Hyderabad with a Euro 5 million (approx. Rs 44 crore) investment to indigenously develop advanced passive safety solutions for both domestic and overseas markets. On the sidelines of this event, Rudolf Stark, EVP, ZF Lifetec, spoke with Autocar Professional to divulge the company’s growth ambitions in India.
What role has been envisaged for the latest ZF Lifetec global competency centre (GCC) in Hyderabad?
The Indian market is currently witnessing a transformation when it comes to vehicle safety, particularly with passive safety becoming increasingly important both from a consumer and an OEM standpoint. However, more than 150,000 people still die on Indian roads every year, and it is here that ZF Lifetec can contribute towards bringing a positive change. We also see the market catching up and OEMs increasing their volumes; and we want to be a part of this journey.
Therefore, to be a good partner to the OEMs, we need highly skilled engineers in India to undertake co-development with our customers. Automobile companies are looking for people next door to carry out development of tailor-made solutions as per their needs. The ZF Lifetec GCC in Hyderabad will serve that very purpose of being closer to our customers, and understanding their unique requirements.
Moreover, devising cost-effective products is also going to be key as even the best technology does not yield major results if it is not affordable. Therefore, we also have our local production set up in India that makes us self-reliant in terms of our supply chain. For instance, we conduct the webbing of seat belts in-house at our Chennai plant to ensure high quality and low cost. Thus, not just development, we have created an entire backbone of production, testing, and validation, and complemented with the sales function, we ensure being as close to our OEM customers as possible.
What are ZF Lifetec’s growth ambitions in India? Are export opportunities also being considered?
Presently, over 48% of ZF Lifetec's global volumes come from North America, followed by 38% from Europe, and roughly 20% from Asia, including the Indian market. We are extremely successful in the other two geographies. We are also successful in India, but not to the same level. Therefore, it is our target to bring the India volumes in the same ballpark as those of the other markets globally.
We are confident about accelerating our market share in India. The timing is also opportune, because India is catching up with the rest of the world in terms of vehicle safety.
As for exports, we are looking at opportunities from India. But, we are currently witnessing a robust growth rate of over 14% in the domestic market. Since this is a substantial amount of growth, our priority is to cater to this demand and serve our local customers in the best possible way.
Having said that, the technology that we are developing in India is for global markets, and we plan to gradually introduce it in other markets as well.
What is ZF Lifetec’s goal when it comes to passive safety systems in vehicles?
The question is what value can we bring to the consumer’s life or even the economy. Based on statistics, the global economy suffers a loss of US$ 1.3 trillion every year due to deaths in road accidents. We have seen the positive impact of technological interventions in this area in global markets. For instance, when new passive safety systems such as seatbelts and airbags were introduced in Germany over three decades ago, they reduced the road fatalities significantly. Therefore, our foremost target is to save the vehicle occupant from injuries during a crash. The other responsibility is to also protect the complete road ecosystem from damage. These are the key drivers that lead us to the direction of contributing and bringing added value to the economy.
Having said that, a bigger difference will also happen based on volumes when a greater number of vehicles equipped with the safety technology will create a larger, positive impact. Moreover, the higher the volumes, the better the purchasing prices of components from our vendors.
What is ZF Lifetec’s product localisation roadmap for India?
While, in India, we always begin with the final assembly of any new product, within this year, we are increasing the capacity to locally manufacture airbag inflators in India. We do not do it in every country – only in important markets, of which India is one today for ZF Lifetec. After Germany (Europe), Arizona (North America), and China, India is the only location for ZF to locally manufacture airbag inflators of global quality standards. We have a capacity to produce 3 million airbag inflators every year at our plant in Trichy.
Similarly, we are doing the webbing for seat belts in-house and are not just catering to the domestic market, but also exporting it out of India. We have an annual production capacity of 36 million meters of seatbelts at our Chennai plant. This is a testament to the fact that India is not just a location for just final assembly and distribution, but we are also producing world-class technology here. Having said that, there is always scope for improvement in localisation. While it depends upon higher volumes, that is what we are preparing for now.
What are some of the emerging technological trends in passive safety in automobiles?
While there have been several innovations in passive safety systems over the last three decades, the next evolutionary step now is that, as all the new requirements and passive safety are coming into vehicles, we must enable them with a safety-first approach.
In that regard, in every market around the world, we are seeing a growing trend for connectivity and big infotainment displays inside vehicles. Thus, we have developed solutions that liberate the prime real estate inside the cabin and allow OEMs to offer aesthetically pleasing designs.
For example, by relocating the airbags from the steering wheel and dashboard, we have developed solutions to place the airbag behind the steering wheel, or in the roof, to free up space for display integrations for both driver and the front passenger.
Secondly, with EVs being heavier and more rigid compared to ICE vehicles, they behave differently in the event of a crash. Moreover, there is also the need for protecting both vehicle occupants as well as other road users, such as pedestrians. Hence, one example of our safety solution is a hood lifter that makes a crash less critical for the pedestrian.
Lastly, sooner or later, the steering wheel inside cars will become redundant with autonomous vehicles becoming mainstream. Autonomous driving is inevitable, and while it is challenging from a safety systems provider's point of view, the important thing is that the shift is going to be more gradual than sudden.
But in the meantime, the steering wheel will continue to remain the interface between the driver and vehicle. Therefore, in the mid-term future, we will see highly sophisticated steering wheels equipped with functionalities such as Hands-On-Detection (HOD) that would monitor the driver’s attentiveness.
These are some of the advanced technologies we are presently working on in sync with the emerging vehicle trends to offer maximum protection to not just vehicle occupants but all road users. There is a lot more innovation that is to come from ZF Lifetec in the future.