The company has committed an investment of Rs 1,800 crore in its Oragadam facility, which will manufacture advanced automotive components for commercial vehicles and passenger vehicles.
15 Feb 2024 | 11721 Views | By Kiran Murali
After establishing a strong presence in the commercial vehicle space, German auto component maker ZF Group’s Indian unit now plans to focus on expanding and strengthening its offering for the passenger car market going forward.
The company sees a big opportunity in this space with the pace of electric ...
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After establishing a strong presence in the commercial vehicle space, German auto component maker ZF Group’s Indian unit now plans to focus on expanding and strengthening its offering for the passenger car market going forward.
The company sees a big opportunity in this space with the pace of electric vehicle adoption picking up, and a growing consumer desire for comfort and safety features and bigger vehicle sizes.
“We already have a strong market share in the commercial vehicle segment. The high focus now going forward is on the passenger car segment. With higher sales of SUVs in the last 2 years and the government introducing more regulations, there is a lot of opportunity for us on the car side,” ZF India President Akash Passey said.
Electric vehicle adoption in the passenger vehicle segment has been slow in India but automakers are expecting the pace to be faster from 2025, as companies prepare to launch models built on dedicated electric vehicle platforms.
“In the passenger car segment, already several large volume producers have started going for fully electric platforms. That is a major opportunity for us,” Passey told reporters.
Globally, ZF Group generates around 70% of its business from passenger cars. But that has not been the case in India, where the sales were once significantly driven by entry or small cars priced less than Rs 5-6 lakh.
However, with the growing desire for SUVs and models with higher specifications and features such as airbags, parking assists and seat belts, the company is now also looking to tap the Indian car market for incremental business.
“We are in discussion at this moment to draw the strategy for our customers in both these areas (electric and ICE). But yes, electric is something which we could offer us maximum opportunity,” Passey said.
The company, however, did not disclose any specific segment mix or target of its offering. “What will it bring in terms of percentage of number, it would be a period of time when that horizon will become clearer for us,” he added.
Meanwhile, ZF Group has committed an investment of Rs 1,800 crore for its facility in Oragadam, Tamil Nadu. The plant, which is its 19th in the country, was inaugurated on Tuesday and will manufacture components for offering safety, automated and connected features in commercial vehicles and passenger vehicles.
The investment in Oragadam is part of the company’s refreshed strategy for a turnover of 3 billion euros from India by 2030. The investment will be made in multiple trances in ten years. It has already invested Rs 175 crore, with an additional Rs 30 crore planned by the end of this year. The company is eyeing a revenue of Rs 100 crore from the Oragadam facility this year.