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Wabco India

German firm ZF expects to be a EUR 3 billion company in India by 2030 mainly supported by the growing domestic market and overseas operations, Holger Klein, ZF Member of the Board responsible for Asia Pacific and India, told ETAuto.

“We are aiming to establish India as a region with decision-making power to drive the business. In this process we want to achieve EUR 3 billion revenue from the Indian market, out of which EUR 2 billion will be from sourcing volumes,” Klein said.

The Pune-based ZF India currently accounts for 3%-5% of the Group’s turnover. ZF will integrate its commercial vehicle business with the recently-acquired Wabco into one division named Commercial Vehicle Systems which will be operational from January 1, 2022.

In India, the branding of Wabco will switch to ZF in January 2022, P Kaniappan, MD, Wabco India, said.

Last month, ZF, which is into driveline and chassis technology as well as active and passive safety, has announced an investment of about EUR 200 million in India and consolidation of its business domains here to drive growth in the next decade.

This investment is the company’s intensive medium-term plan to rapidly grow the business in the country and the investment will be directed to product launches, manufacturing and engineering footprint expansions, hiring and other developments across all business domains.

With the continued focus on transformation of mobility, ZF completed a EUR 7 billion acquisition of commercial vehicle technology company Wabco during an economically challenging environment last year. With this acquisition ZF has become the second largest auto supplier globally after Bosch.

“Wabco at present holds about 77% of the equity shares but as per the regulation, Wabco India can only hold a maximum of 75%. We are in the process of selling some of the shares to reach the required limit,” Kaniappan said.

On June 22, auto component maker Wabco India proposed to sell 5 lakh equity shares of a face value of INR 5 each representing 2.64% of the total issued and paid-up equity share capital of the company.

Beyond component manufacturing

ZF also sees software as a new field of business and plans to restructure itself as a system solution provider. Klein said that the software share in the vehicle will continue to increase, and more and more components will be equipped with sensors, the potential data sources.

“On the pure software side we started to sell 2 years ago to the first Chinese OEM, the vehicle motion control software in an ICE model and this is picking up fast. Though software is not yet sizable, it will become more and more a trend,” he added.

Suresh KV, country head, ZF India, believes that barring some structural components the rest of all components will be driven by electronics and software. “In the medium term, 80%-90% of cars will be driven by electronics, hardly any component will remain purely mechanical,” he said.

ZF has also developed the entire range of e-mobility ranging from engine, power electronics, inverter, reduction gear. Klein asserts that the development of such systems is reaching quite a sizable figure.

“Many OEMs till now prefer to pick and choose but If they take the complete system from us, we believe it can substantially increase the energy efficiency of their vehicles,” Suresh added.

At the beginning of 2021, ZF formed the new Electrified Powertrain Technology Division that combines conventional, hybrid and purely electric drive technologies for passenger cars.

The company wants to establish India as a manufacturing and service hub in the coming years. In the process ZF is also trying to consolidate its operations in the country and planning to take actions against the other companies using the same brand name that could mislead the public. One such company is ZF Steering Gear (India) Ltd. “When somebody is operating under your and perhaps not working with the same standards it might cause a risk. We definitely question the company from using the same name and might take some legal course, if required,” Klein asserted


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This is still grey area. Schaffler did the merging of all entity under one umbrella. Whether ZF will do? ZF already has 77% Shareholding in wabco and it is difficult. Need to wait and see.

From January 1, 2022 - Wabco India will become ZF India.

Inside ZF India,It will drive the Commercial Vehicle Solutions ( combined entity of ZF + Wabco). In the previous article, the thirst for frugal manufacturing emphasised

“EUR 3 billion company in India by 2030 mainly supported by the growing domestic market and overseas operations” Which is 26500 crores sales by 2030.

It is a really big dream because present sales is 2000crores. 13x sales in 10 years. Hope, even if they achieve 4x sales, it is grt. Software services can be good business going forward. Presently it is very small ( represented in Other income)

Export business is going to be very big for Wabco going forward.

Note:trimmed few at 7500. Still have 8% of my portfolio from the first OFS and second OFS. So my views are biased.

Press Release from ZF parent company: Very interesting to note


ZF Commercial Vehicle Solutions: On Track to be Global #1

  • ZF is on course to launch its new division for commercial vehicles, combining ZF’s Commercial Vehicle Technology and Commercial Vehicle Control Systems Divisions from January 1, 2022.
  • Wilhelm Rehm, Member of the ZF Board of Management, appointed to lead new Commercial Vehicle Solutions Division world-wide.
  • Key divisional leadership appointments also announced.

Friedrichshafen, Germany. ZF has today appointed Wilhelm Rehm to head its forthcoming new Commercial Vehicle Solutions Division. Rehm, Member of the ZF Board of Management, oversees the commercial vehicle business in addition to industrial technology and materials management. Powerfully combining the technology expertise and capabilities of ZF, the new Commercial Vehicle Solutions Division will have the scale and resources to further accelerate ZF’s ambitious commercial vehicle growth strategy world-wide.

ZF Commercial Vehicle Solutions: On Track to be Global #1

Rehm has held a Board of Management position since 2012. His appointment to lead the new division, and spearhead a leadership team selected from both Divisions, provides strong continuity in ZF’s Group’s structure. With this advance, the company will further build on its current position as the world’s biggest technology component and systems supplier to the commercial vehicle sector.

“ZF’s Commercial Vehicle Solutions Division, on schedule to launch January 1, 2022, will be uniquely positioned to support the ambitions of truck, bus, coach and trailer OEMs, as well as fleets, world-wide,” explained Rehm. “With well-defined strategies to mobilize commercial vehicle intelligence, the Commercial Vehicle Solutions Division will be structured to maintain close proximity to customers in every region,” explained Rehm. “We believe this approach, combined with the breadth and depth of capability we can bring to innovate, supply and integrate onboard systems and technology, will offer new levels of benefit and value-enhancing synergies for customers.”

“Bringing together ZF’s expertise and capabilities, the Commercial Vehicle Solutions Division will further build on our combined technology successes. This includes the recent launch of OnGuardMAX, our most advanced autonomous emergency braking assistance system and ZF’s first complete ‘in-house’ system integrating camera, radar, ECU and actuation for commercial vehicles. In line with ZF’s ‘Next Generation Mobility’ strategy, the division will also help ZF leapfrog towards market leadership in e-mobility, vehicle operating systems, autonomous driving and digitalization,” added Rehm.

Alongside announcing the Division’s new leadership team, Mr. Rehm wholeheartedly thanked both leaders of ZF’s commercial vehicle divisions who strongly supported the acquisition’s strategic logic and integration efforts. Andreas Moser, who led ZF’s Commercial Vehicle Division as Executive Vice President was appointed to lead ZF’s Division Industrial Technology from April his year. Fredrik Staedtler, Executive Vice President of the Commercial Vehicle Control Systems Division, has elected to leave ZF for personal reasons and by mutual best agreement.

Key Appointments

Within the leadership team for ZF’s new Commercial Vehicle Solutions Division, the following lead roles and regional customer business specificities have also been announced:

R&D and Systems Solutions: Dr. Christian Brenneke

EMEA: Nick Rens and Kleber Vinhas

APAC: Sujie Yu

The Americas: Julien Plenchette

India: P. Kaniappan

Together, ZF’s current Commercial Vehicle Technology and Control Systems divisions are supported by approximately 25,000 employees networked across 61 locations in 28 countries.


Multiple triggers in place
• With multiple years of downcycle in CV sector, possibility of strong revival is there. Wabco is likely to benefit from the tailwind due to strong and feature-rich component portfolio for CVs.
• This time, upcycle may be prolonged due to implementation of compulsory scrappage of old and unfit CVs from April 2023.
• Semiconductor shortage remains a near term challenge for the auto industry. While shortage may remain for few quarters; acute shortage period is not likely to be long and situation is expected to bottom-out soon.
• Clear road map of parent company ZF to make Wabco an export hub for commercial vehicle components and software business, as reflected in its various announcements and planned capex of ~Rs.18 bn over next 10 years. MOU with Tamil Nadu govt, incorporation of a subsidiary under Wabco and leasing of land are visible sign that movement has already started on this.
• PLI policy for the industry is to be announced soon and with such a clear rod map for capex and exports, Wabco may be a participant. Although, policy announcement is pending and the company management has also not made comments about the same. Any development on this would further improve visibility on growth.
• With the last tranche of OFS by the promoters to bring down stake to 75% completed recently, overhang of supply is over. Major part of free float is in the hands of few funds.
• Key risks are any prolonged semiconductor shortage, lower than expected recovery in CV sector and high commodity prices.

Disclosure: Invested

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