Suresh KV: 'Customers must see value in spending on safety'

The President and Regional Head of ZF India, Suresh KV, says India needs to catch up with global standards in safety even as it must use its engineering strengths to provide low-cost automation and value to the customer.

From a supplier’s point of view, what are the thoughts on safety that come to your mind?
We have been hearing about safety from way back in the 1980 and 90s from the shop floor point of view, and which created some sort of turbulence. Safety was not a priority at that time, and only over a period of time have the use of goggles and personal protective equipment became a part of our lives.  It is good that we are talking about vehicle safety but unfortunately, our position as a country is not a happy one as we have one of the world’s highest accident rates. So, it is critical for us to look at safety.

As a supplier, and from a ZF perspective, I am happy because our product lines include active and passive safety components. It is also commendable that the government is giving importance to implementation of and establishment of safety regulations. As a human being, I am delighted that we are looking at this not just for the high end but all segments of cars. Safety is important for all of us, and should not be related to economic status. We have regulations and there are costs attached but we have to demonstrate the value that a person gets by spending on safety aspects of a vehicle, and which is higher than the cost. That is critical and a challenge both from a supplier as well as OEM perspective.

Having said that, we also need to build infrastructure and encourage lane discipline. Our highways may have such lane marks but it is highly unlikely in roads that are in the hinterland. So, the steps  we have taken as a country are in the right direction and so too, the motives, and having said that, over the last two decades, we have covered some distance in the safety journey.

There have been talks about all cars, even at the entry-level, to have six airbags. Wouldn’t this have cost implications?
When ABS was first introduced, there were discussions on a similar vein. In my view, it is a matter of getting used to safe practices. For example, we were not used to using masks even as of 2020 and there was reluctance but we have had to get used to it, and now what we spend is of value to ensure that we protect ourselves against Covid.

So, in the initial phase, there will be costs but five years down the line, it will be seen as a part and parcel of our vehicles. We will have to, necessarily, go through these discussions, and whether it will be a detrimental factor or not, we will get there. We cannot really avoid the cost related discussions that are now on-going but the larger value will prevail and people will accept that this is important.

How does one handle the costs issue given that we are a cost-conscious nation?
We are not a cost sensitive market but a value-based market. When the airbag rule gets implemented, there will be an increase in costs but volumes will go up too, and the costs per unit will come down from a supply point. Costs will come down as it gets distributed over a large volume.

It is also important to understand that airbags will give you the comfort factor that in the event of an accident, lives can be saved. So, the value to the buyer is much more than cost. An Indian consumer at the entry level will understand the costs aspect and understand the value. Volumes will make up for the costs. These volumes will be two to three times the current numbers.

How would you react to the argument that regulations are way too excessive and copying from Europe doesn’t make sense?
To answer that, let me take the example of the mobile phone. Today’s phone comes with added features, and costs have gone up. But the demand is there. Mobiles have not got cheaper. So it holds for safety features as it is saving your life.

As road infrastructure grows and gets better, and people drive much more at speeds at 70 to 100 kmph, I am sure that we are concerned about safety, and that of their kith and kin, and this is different from the past. The consciousness and approach to safety has changed,  from what it was way back in the 1970s.

As far as regulations go, you say they are coming thick and fast but unfortunately, we have a lot of catching up to do. At some point, we have to catch up with Europe and western countries because it’s not about copying Europe but it is valuing our lives. So whether we copy from Europe isn’t the issue. The life of an Indian, we are saying, is equally important as that of a westerner. As a society we need to protect their lives. A pedestrian or driver must, therefore, have protective equipment. So, when you put this hat on, these regulations fall into line.

So, are issues like slow city speeds not quite relevant?
Id does not. Take scrappage, it’s not to increase volumes but this is to ensure that these old vehicles which are a potential hazard are removed, and we are safer. This is a welcome move and soon we will have the latest vehicles on our roads. So, we will have to go through this catch up mode and ensure that Indian lives are protected. There is no compromise.

India is a value for money market but frugal engineering can be a challenge. How does one abide by these norms and yet be able to cater to the mass market?
We have quite some work to do. We cannot say it’s expensive but it has to be bought. We need strong engineering support in order to ensure that we have an affordable per price piece. As an OEM representative said to me, that we need your products at Indian price and Indian speed and that’s the challenge.

So, frugality is very important and we need Indian engineers to look at adapting these products for India, not just products but design and processes as well. It’s capital intensive shopfloors overseas and so we should look at cost automation and this makes the conversion costs a lot lower than in the western world. Frugal engineering and low-cost automation is imperative and this has been a success.

How does one adopt the right product from the menu card  and offer it in India? So,  it’s just not the industrialisation aspect but also important to bring in engineering to look at product design and process. If this can be done well, I am confident that we can meet the customer’s expectations.

So, work would have begun on this front. Can you tell us a bit about what ZF is doing?
We recently expanded our tech centre in Hyderabad. We started with a strong focus on software but now we are also doing a lot of benchmarking studies with the engineering team and using it to show customers what we can do with the ZF product portfolio,  and make these which are a success abroad adapted for India. The way we go about it is to use alternative materials and ensure that conversion is lower with a combination of product design, design process, product application and application engineering, the capabilities of which we have here and can help ZF meet its customer expectations. It is hard work and there is the intent but that doesn’t mean we can achieve. We have to persevere , and along the line, there will be both successes and failures.

If you have a price point in Germany, what would the India price be?
I would say that on average, it is 20-30 percent lesser but a lot depends on product to product. For technology products, it is difficult but perhaps when we consider the catalogue product, one can reduce the price a lot more, and that makes it attractive to an Indian purchaser. We also have to look at the possibilities of what we can adapt for the Indian market. So, I would say the matrix includes the technology, kind of product and demand in the Indian market.

The Indian auto sector is part of a global supply chain and nowadays, we talk about atma nirbharta or self-reliance. How do we go about this?
When we start out on a project, it’s easy to say we can localise and achieve our targets. But the fact is that this can be done over a period of time. We may have to start by say importing a product. We would first try to localise the high cost products, and as the product matures, we look at localisation and changing the base from supply to India once we know what volume an Indian supplier can provide. For low volume items, it’s difficult but for the high volume, easier for India

So you would reiterate the fact that we cannot live in isolation?
We cannot live in isolation but must aim to minimise our dependence on an outside source. We may have a product that can be imported but we would look at having a source in India to validate it because when there is a sudden surge in demand, there is this cheaper source rather than air freighting it into India. So, we are prepared to handle the situation on a rainy day but not on a  normal day, its expensive. We basically operate with a 80: 20 rule in place. So, we keep an Indian source valid and running just in case. We cannot completely isolate ourselves entirely from the global chain or other regions, and vice versa.

Disruption and electrification are now the challenges of our times. How does one approach these from a safety perspective?
Electrification is a new technology, and we have seen recent accidents. New technologies do go through a learning curve and we have to learn to handle this. The monsoons are near and basements get flooded and some areas of the country get unprecedented rains as well, so we have to take this into account. If one has a charging point, for example, in your basement, it can be risky if the area gets flooded. Our safety orientation is not as high as it should be though we have come a long way. Again, I go back to the example of mobiles where in the early stage, a device may have got burnt. The incidence of such cases has reduced drastically, but there will be instances in the safety domain, some will be prevented and some where we will learn the hard way.

Finally, on safety, what are ZF India’s initiatives?
We are bringing in safety products and working closely with our many stakeholders and this covers airbags and seatbelts. We do a lot of focus on safety in our working environment. We do a lot to ensure that traffic signals are provided at junctions which are accident prone. ZF India supports hospitals and provide help in preventive safety issues and solving other safety issues. We have many products and provide the support that is required for the product range. We extend whatever support we can to society at large too to make it safer. We proactively want to make industry, our own employees and the wider world safer. We want this planet to be safer for everyone.

The interview was transcribed by Brian de Souza