November 1, 2012: Dr Peter Ottenbruch, Board Member, ZF Group


Autocar Pro News DeskBy Autocar Pro News Desk calendar 01 Nov 2012 Views icon2702 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
November 1, 2012: Dr Peter Ottenbruch, Board Member, ZF Group

China contributes to over 10 percent of ZF’s global turnover. What kind of growth do you see coming from India?
At present, 75 percent of ZF’s Asia-Pacific revenue comes from China. Of the rest, India has the biggest portion. India is a growing market; its requirement for technology is increasing. The requirements are coming from two- and three-wheelers to cars that have a need for further technology development. That’s where we can step in.

Do you see ZF’s business in India reaching China levels?
If you don’t ask me for the year, I would say yes because it is also a huge market. It is not exactly like the China story. But in India, the Europe-based OEMs’ increased business will offer us better opportunities. The difference is in the implementation of plans in India and in China.

What about new products for emerging markets?
It is a mixture between making something new and de-contenting existing products. To make something affordable is very difficult. It is easier to start with a new drawing. On the other hand, for trucks, Indian buyers understand that the durability is a key need. Earlier, due to lower manpower costs and other reasons, breakdowns were not a very big issue.When the needs of the market grow and when we do some decontenting, new development and design for the market, we meet the demand. That’s where we are now. If durability is not a major selling point, then we will have a hard time!

Can you give us examples of any such products?
We are looking in the field of powertrain and chassis components because it is easier to design to market a clutch than an entire transmission. Components like clutches and shock absorbers are easier and can be started with first. One is market need, the other is the supplier capability. We should not forget we have to localise in India, to be competitive. That means we have to do redesign the capabilities of the suppliers that we have. Maybe they are not using the same processes of manufacturing that we are used to from our suppliers in Europe. So we have to change that. That’s the reason why we have an engineering team of 20 in Pune.

How do you compare India and China?
We look at India in a totally different way from China. Like India, in China also we have a huge talent pool, but the history is not so long. In Shanghai area, there are around 200,000 engineers graduating every year. There’s a talent pool. They are different from India, and their culture is also different. We have to align ourselves to the different cultures. At the moment, we think the Chinese follow their plans very well and so one can see exactly in what direction the country will develop.In India, it is a little difficult. At the moment, in India there is talk about the next elections. That means that the business can go down in six to eight weeks because nothing happens. There’s more uncertainty in India than in China. But India is a huge market. The needs for technology are growing. We do not have huge surplus cash. We have to wait a little until it is clear what will happen next with the elections and after that. That’s a problem that we face.

Is there any example of any project driven by India under the supervision of the global headquarters?
All the projects of the Nano are the ones that we first tried for the low-cost segment. What we learnt from them has been implemented in other businesses. We think that the price pressure that we feel in India will influence our designs. We are working on that. The mindset is changing.

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