CHENNAI: German auto component giant ZF, the third largest supplier for passenger vehicles, CVs and industrial technology, inaugurated its latest manufacturing plant, at Oragadam, near here, on Wednesday. This is its 19th unit in India and tenth in Tamil Nadu.
“Signed in July 2021 and even after COVID delays all clearances were given by Jan 2022 and the unit has been inaugurated,” tweeted TRB Rajaa, after the opening of the 44-acre facility on Wednesday.
With ZF’s existing investment of Rs 3,500 crore and a workforce of over 9,500 people in TN, “we are confident there is much more in store for ZF’s longstanding partnership with TN,” Rajaa said.
An investment of Rs 1,800 crore at full capacity would generate 5,000 jobs in a decade, a senior official of ZF said at a media round table held later at the new plant.
Apart from expanding ZF’s significant footprint in TN, this addition would bolster the state’s auto-components industry, which already accounts for 35 per cent of India’s total production, the minister said.
This export-oriented, advanced manufacturing plant boasts over “80 per cent female workforce” and operates entirely on renewable energy, Rajaa said.
Peter Laier, member of the ZF Group Board of Management, and head – commercial vehicle solutions and industrial technology, said the group saw India as a strategic market, where its increasing focus was for “design, engineering, and manufacturing capabilities, as well as the growing domestic market.”
Elaborating on three reasons for betting on India, he said significant automotive growth meant an opportunity to serve the Indian market, aided by the new regulations. Also, ZF sees the R&D locational advantage due to availability of skilled labour force that would mean not only developing for India but also for the global markets. Finally, India being a manufacturing hotspot would enable the group to cater to domestic as well as international demand with ‘made in India’ products.
ZF has expanded its focus from commercial vehicles to passenger cars (ICE and EV). As per P Kaniappan, MD, ZF Commercial Vehicle Control Systems India, two of its manufacturing sites in Chennai are already full and this new Oragadam plant would cater to domestic and export markets. An investment of Rs 170 crore had been done in this new facility. “A further investment of Rs 30 crore is proposed this year,” he said.
On the back of growing e-mobility demand, this site would produce components and systems for EVs including the e-comp, a compressed air generation solution, for electric and hybrid commercial vehicle applications, among others. “The current 50 per cent localisation would go up to 70 per cent in a year,” he said, dwelling on the rapidly growing Indian market post COVID resulting in changing vehicle types.
“We see a lot of activity in the tipper segment due to mining activity,” Kaniappan sought to point out.
Akash Passey, president, ZF Group India, gave an overview of the MNC’s India presence, while stating that 85 per cent volume is being exported from Coimbatore (where transmissions and axles for off-highway vehicles are made), which is gearing up for another expansion in a year or so. He also spoke about the opportunity in the SUV segment owing to the new regulations
ZF has 10 engineering centres, including its largest R&D facility in Hyderabad, housing 3,500 employees, out of the overall 15,465 work force in the country. Chennai is the second biggest tech centre deploying over 700 employees, he said.