German supplier ZF has commissioned its wholly owned plant in Pune for the manufacture of off-highway modules, reports Huned Contractor

Sister city to Bremen in Germany, Pune has come to witness the largest con-centration of German companies in India with names like Mercedes Benz, Volkswagen, Lohr, Brose, Norma and more. Yet another German company, ZF Friedrichshafen AG, has a presence in Pune for a while now, and inaugurated a wholly owned plant to cater to off-highway requirements. Located at Nanekarwadi near Pune, the plant was formally inaugurated by Rajendra Darda, Minister for Industries, Employment and Self-Employment in the presence of Hans Georg Haerter, Chairman and CEO, ZF Friedrichshafen AG.

Speaking on the occasion, Hans Georg Haerter said the new facility, spread over 2,500 sq metres, would be used to manufacture the rear axle for backhoe loader applications, to be followed by full power shift transmission systems”. Founded in 1915 in Germany as a gearwheel factory that would supply innovative products designed for optimum mobility, ZF has grown to be a leading supplier of driveline and chassis technology, catering to different segments of the auto sector like aviation, marine, passenger segment, commercial vehicles, construction equipments and agriculture. Employing over 61,000 employees worldwide at 120 production facilities spread across 26 countries, ZF in the year 2008 clocked sales of Euro 12,501 million. Investing roughly 5 per cent of sales turnover of Euro 697 million in R&D in the year 2008, the off-highway equipment plant at Pune is part of a ZF Group subsidiary, ZF Passau GmbH. ZF Passau GmbH is responsible for the ZF off-road driveline technology and axle systems division and specialises in the development and manufacturing of transmissions and axles for agricultural machinery and construction vehicles, commercial vehicle chassis modules and axle drives for passenger cars.

Focused on the manufacture of rear axle for backhoe loader applications, to be followed by full power shift transmission systems, the Pune plant, according to Piyush Munot, Director, ZF India, has an installed capacity to make 10,000 axles for backhoe loader applications per year and 10,000 full power shift transmission systems. Part of the plan to invest about Rs 120 to Rs 150 million through 2010 to 2011, including the setting up of another plant at Ranjangaon near Pune to cater to the axle demands of the commercial vehicles and passenger cars, the company already has orders for the supply of 2000 axles. “We have a confirmed order book of 2,000 rear axles as of now and our major customers are JCB, Tata Constructions, Telcon, BEML, Greaves, Godrej Constructions and others in the off-road construction segment and Ashok Leyland in the commercial vehicle segment,” remarked Munot.

Elaborating about the need to set up its wholly owned plant despite its presence in India for more than three decades through various joint venture partnerships such as ZF Steering Gear, ZF Lenksysteme, Sona Somic Lemforder Components and TVS Cherry, Haerter averred that the decision to build this plant was a conscious one, taken after studying the Indian growth scenario wherein the construction sector has been doing very well, except of course during the period of recession. “With the country’s GDP growth pegged at 8 per cent and the new government’s focus on developing infrastructure, there is going to be a huge market for construction equipment. Since we specialise in the production of transmission and axle systems for mobile excavators, backhoe loaders, dumpers, concrete mixer trucks, wheel loaders, graders, compact loaders and rollers, we decided to have our presence here,” he added.

With a focus to gain a prominent market share in India for its products, there is quite a chance that the Pune facility will also supply rear axles and full power transmission systems for backhoe loaders that are manufactured at its plant at Passau (Germany) and elsewhere. “We may eventually consider sourcing forgings, castings and finished goods from India for our various plants located across the world. But it would be too early now to put a figure to it,” stated Haerter. Explaining on turning the production facility in India competitive, Klaus Sicker, Vice-President, Off-Road Division, ZF India, said that there is a strong focus on localisation of parts with vendors in order to give the cost advantage to the customers. Considering our increasing list of customers in the construction sector, it makes logistic sense to make the axles here rather than import them from Passau.”

ZF also formally inaugurated its service operations in India to address the after-market requirements of the country. The company has established company-owned service stations at Pune, Raipur and Bangalore, while Delhi is represented through a service partner. These centres will ensure the quickest possible response to field concerns and after-market sales. Commented Haerter, “We are aiming at setting up a minimum of 40-50 service stations with the support of local partners.” Without any intention to disturb the present relationships, ZF in India has begun discussions with ZF Lenksysteme to expand its product range. According to Haerter, ZF would enter the passenger car segment through this company.

Turning to the financial picture of the company, Haerter said that even though ZF’s global revenues had spiralled downwards by 23 per cent last year, the management was confident of crossing the Euro 10 billion revenue mark this year. “The group’s business in India is expected to grow at 8 per cent while orders from China, US and Russia have already picked up. The Indian operations are expected to generate around Euro 200 million in the next two to three years,” he said. Apart from the construction segment, ZF India will also tap other sectors such as marine, aviation and mechanical engineering. “India now offers wonderful scope to put our entire range of products to use,” Haerter concluded.