ZF Group to Boost India Sourcing to 2 Billion by 2030 for Global Expansion
ZF Group, a German technology manufacturing firm, plans to invest INR 2 billion (Rs 18,750 crore) by 2030 to enhance its material sourcing from India. This expansion will support both its local and global operations across passenger cars, commercial vehicles, and industrial technology, including wind power. Presently, the company spends INR 600 million on sourcing materials from India.
"India's economy is doing well. And with the good government policies, we see high growth coming in", said Akash Passey, president, ZF Group India, adding that the company has set a sales target of INR 3 billion by 2030. ZF India ended FY24 with a revenue of INR 10,000 crore. The company serves the passenger car and commercial vehicles segments, and also other market segments such as construction and agricultural machinery, wind power, marine propulsion, rail drives, and test systems.
ZF Group operates 18 manufacturing facilities and 10 engineering centers in India, employing over 16,000 people. Regarding sales distribution, Europe accounts for 44%, North America 28%, Asia Pacific 24%, South America 3%, and Africa 1%. The company’s revenue comes from three primary segments: 74% from cars and light commercial vehicles, 18% from commercial vehicles, and 8% from industrial sectors, including wind energy.
The group's arm, ZF Wind Power is India's largest supplier of wind turbine gearboxes. Its factory in Coimbatore, Tamil Nadu, is the largest plant for wind gearbox production in the world, outside China. ZF Wind Power Coimbatore became the first plant in India to roll out 50 gigawatts of wind gearboxes since inception. ZF has globally produced 200 GW of wind gearboxes so far, with 50 GW or 25% being manufactured in Coimbatore.
ZF Wind Power plans to invest INR 50 million to increase the capacity of its Coimbatore facility from the current 9 GW to 12 GW by 2025. The company has already invested INR 230 million in this plant. "This facility primarily focuses on exports, particularly to the US, where market growth is driving the expansion. This is why we are now investing in increasing capacity from 9 to 12 GW. We are fully booked", stated Felix Henseler, CEO of ZF Wind Power.
"We have, in the economics of India, too less scrap. So, therefore, to produce our castings, we need scrap. And if you need to import scrap, it is very expensive", Henseler said, adding that energy costs are higher in India than in China. The company exports 80% of its production from the Coimbatore plant. The plant also serves as a service centre for the company with a capacity of up to 3 MW. The company is planning to increase the capacity in the near future.
ZF Wind Power is a significant player in the global offshore market and anticipates India's offshore wind market to gain momentum in the next three years. With a 7,600 km-long coastline, India has immense potential to accelerate offshore wind power capacity. The Union budget has approved a INR 7,453 crore offshore wind funding scheme to jumpstart the industry.
