Targets double-digit growth in 2013,is bullish about the passenger car segment in India, and is also campaigning against spurious parts, says Amit Panday.
The operations of ZF Services in India cover areas: commodities items (shock absorbers, clutches, steering and suspension products, the largest vertical by revenues) and the service part, which is mainly related to the aggregates made in India like transmissions and axles for construction equipment (CEs), commercial vehicles (CVs) and others. “As our third part, since we manufacture full aggregates, we are obliged to provide the service readiness within the warranty period or after,” says Grasser.
The company has recently expanded its aftermarket product line with new products such as steering gears, pumps and electric steering columns under the new ZF Lenksysteme brand. The new products will be supplied to all dealers with new packaging.
Without disclosing the figures, he elaborates that “ZF Services holds a reasonable share in the Group’s overall business in India. Because it is not only about the parts which we manufacture or assemble here but also includes our products which are imported (on the vehicles) into India. For example, transmissions or clutches within the car or CVs or CEs. So we actually have a broad range of products in India which we need to offer and sell in the market despite our current production portfolio here.”
ZF Services’ marketing and sales promotion initiatives depend on region to region. For example, it has a more focussed approach for commodity products such as shock absorbers, clutches and others for passenger cars in regions like Delhi NCR, Mumbai, Chennai and Punjab. “If we talk about CEs and mining trucks, it targets Hyderabad, Bilaspur, Dhanbad, and also Gujarat. For buses, we focus on Delhi, Mumbai, Bangalore, Hyderabad and others,” says Grasser.
However, owing to the sheer size of the country, ZF Services faces several challenges. According to Grasser, logistics and supply of parts across all regions as per the demands constitute a huge challenge in India. As part of the plan to handle this, it has moved into a new warehouse facility in Pune last January and plans to upgrade its entire IT system along with an all-new warehouse management system (WMS).
“The different tax structure between different states poses a challenge. For example, if we have to provide spring units to trucks and construction equipment in the mining areas from here, it is an issue as tax structures are not uniform, ” he said.
Grasser firmly believes that the auto aftermarket segment does not depend on the economic stability or sales of new cars. “Our business starts 3-4 years after a vehicle is sold. Hence, for us, our priority is to get more aggregates and parts into the market,” he says.
ZF Services has recorded a growth of 37 percent last year (during 2012 over 2011). For 2013, he added that “we don’t expect to grow by those numbers, but it would be a good two- digit increase over the last year.”
ZF Services in India was not present in a major way in the passenger car aftermarket segment and began its innings on a serious note in January 2013. “While CVs and CEs have been our stronger parts, I see that in the coming years, cars and CVs/CEs will be on the same page (in terms of revenues) and in the long run, the car business would be bigger in size.”
On other fronts, ZF Services is also targeting counterfeit spares. “We plan to reject any spare part which comes to us as a warranty or a claim and was not distributed via our official distributorships. So whichever region such parts might be coming in from, could be Middle East, South East Asia or East Asia, we will inform all our partners and even their partners so that everyone is aware that we are not accepting fake parts at all. This will kick off by the start of 2014,” concludes Grasser.
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