ZF gears up for new mobility solutions

Stefan Sommer grins when asked if his company will contemplate making a car in the near future.

“We have skills in safety systems, chassis and driveline systems but if you look at a complete car, whether is the interiors or body shell, it requires a lot of competencies,” says the Chief Executive Officer of ZF, the world’s leading auto component manufacturer headquartered in Germany.

Yet, Sommer admits there is an exciting world of mobility emerging where ancillary suppliers like ZF can play a big role in providing solutions. And even while the Apple and Google are planning to throw down the gauntlet to established automobile manufacturers, the ZF chief would rather take a more pragmatic approach.

“We are thinking about serving mobility of the last mile, which could be a two-wheeler or any new concept but not something like a car,” says Sommer. “If this means two-wheelers, people movers or delivery robots carrying parcels as mobility solutions of the future, we will be open to such ideas.”

It is precisely for this reason that ZF has already formed think-tanks within the company to come up with ideas on safety and last mile connectivity, which will involve developing appropriate solutions. Manpower resources for this new thought process are drawn from within the company along with some fresh hires.

The idea is to create a new environment for this group and release them from the old processes by “giving them the space to create and follow up on ideas”. To that extent, ZF is truly gearing up for a completely new world of mobility. “We are seeing that mobility needs are changing and a lot of urban areas will be emission free in the future,” says Sommer.

The solutions here could vary depending on distances across cities. All this will translate into a lot of opportunities that puts in perspective the role of the think-tanks at ZF who will constantly throw up new ideas in supporting these mobility needs with new products.

“Of course, needs will vary across the world right from North America, India and China to Japan and Europe,” says the ZF chief. “To have the right solutions for these regions, we need to be stronger in the region and have better understanding in the process.”

Yet, Sommer is categorical that the core of the company will remain intact and the idea is only to focus on further development. “We will stay true to our core qualities in mechanical engineering, which we are known for and appreciated by our customers. We will add to this the digital world and new competencies,” he says.

Eventually, the idea is to be versatile enough to be able to meet future challenges. On one side is the mechanical world that is about plants. As Sommer says, they cannot be as flexible as new start-up companies or software solutions with “young guys working in a flexible environment”. In a plant, every part needs to be in shape and the machines well greased and in good working condition.

This is a completely different world and the big challenge is to “balance these two interfaces” within the company. “To that extent, it is more an addition rather than a transformation. We will still stay as a company that delivers mechanical products, which we call intelligent mechanical products that are ready for the future world,” reiterates Sommer.

At on end, the priority is to have fresh thinkers and “flexible digital environments” so that they feel at home. These people will then need to be bridged into the mechanical world to make intelligent mechanical products which “see, think and act”.

“We need all three because if we only ‘see’ or ‘think’, you cannot steer a car around the corner. At the end, you need the ‘act’ where you need the right steering systems to turn and drive the car or brake. It is a combination of all three,” says Sommer.

ZF had recently set up a new division for electro-mobility keeping in line with future trends where car-makers across the world are going flat out in their efforts to go electric. And even while India has little going in this department right now, ZF believes things could change given the ambitious deadline for Bharat Stage VI norms in 2020.

“We could contribute to this with our technologies, which include automated transmission as well as intelligent electrification in some areas to achieve those aggressive targets,” says Sommer.

The ZF chief, who was in India for the inauguration of the technical centre in Hyderabad, is extremely upbeat on the potential here. “We need fruitful ideas and we can bring that from India to the world,” he says. “When we have the Hyderabad tech centre fully running and give people the freedom to think about their products, who knows what will come out of it.”

The tech centre will also be the location, “which we will grow very aggressively every year” in software and mechanical engineering competencies to support ZF engineering centres across the world. Hyderabad, to that extent, marks “the switch of the ignition” where aggressive growth plans are envisaged.

The world is, of course, changing with new geopolitical realities and a sweeping wave of populism across the US and Europe. Sommer admits that scenarios like Brexit or weakening the NAFTA region are not exactly positive signs but all is not lost yet. “There are a lot of dark clouds right now but there is no rain from them yet. So long as they give a shadow, it is fine but if it starts to rain then we will need some umbrellas,” he declares.