ZF on the move with India operations

Wilhelm Rehm reminds me that there are still a couple of months to go before ZF Friedrichshafen turns 100. By then, it will have completed its acquisition of TRW Automotive which will catapult it to the top three automotive suppliers globally.

Rehm, who is on the ZF Board and Global Head of Material Management, was in India recently for the inaugural of the German company’s new plant in Pune. “It is one of the best moments for ZF with this new plant. We have brought now together several businesses in one location in Pune,” he said in a telephone interview.

According to Rudi von Meister, ZF’s President of Asia-Pacific, India would play a key role in supporting operations in the region.

Eyes on India

Today, Asia-Pacific is the most important region for ZF after Europe and North America. After China, India is the next biggest market for the company in this part of the world and meets the needs of a host of user industries. Von Meister said India has a huge talent pool which could be leveraged to ZF’s advantage.

“To transform our company to a global player, we need all levels of leadership and must use talent here to plant our flag in different parts of the world,” he added.

ZF’s India presence includes eight plants in Pune, Pantnagar, Gurgaon, Chennai, Coimbatore and Madurai. The new facility will also be home to the headquarters of aftermarket sales and services, engineering and administration.

Rehm said the company has constantly been bullish on India. “We will invest here and build up local sourcing by creating a purchasing hub. Indian suppliers can be part of the ZF global supply chain,” he added. Eventually, as Rehm said, ZF as a Tier 1 supplier would have to follow its customers across the world.

Today, there are lots of carmakers heading out to Mexico which throws up interesting business dynamics. “As part of our 2025 corporate strategy, we have to build our resources in regions across the world. We are hoping to see faster growth in India,” he said.

The biggest news though is the TRW buyout where the formalities are expected to be complete by end-June. The decision was first announced last September and there is still some work that needs to be done. While ZF is a leader in driveline and chassis technology, the US-based TRW makes integrated vehicle control and driver assist systems.

Stefan Sommer, CEO of ZF, has said in the 2014 annual report that the acquisition of TRW will substantially help achieve goals in terms of balanced global market penetration, expansion of technology and cost leadership, and profitable diversification within a shorter time frame.

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