Diversity of Opportunities Keeps ZF Ahead

By T Murrali:

Germany-headquartered ZF Friedrichshafen AG, which specialises in driveline and chassis technology,aims to contribute more to the content of a car in the coming years. The company will also increase its budget for localisation, depending on the product portfolio and market demand.
Today, the value-add of an OEM is 20 to 25 percent of the value chain, the rest is from suppliers. Some OEMs rely heavily on those suppliers who offer a whole range of products. This provides the suppliers the scope to enhance their contribution in terms of content in a vehicle, Dr Holger Klein, Member of the Board, ZF, said.
“Our customers are very clear on what they want from us so we must provide them smarter solutions for which we need to have the systems knowledge. There are also customers who want immediate solutions without caring about cost. This covers autonomous driving, robot taxis that run 24 hours, seven days a week, for which the cost goes up but the payback is within half-a-year; it’s another business model. At the end of the day the content per vehicle would increase,” he said.
This trend is expected to grow even as costs could go up but market share would spread. Klein also said that the prediction for growth in the next five to ten years was that certain car models will grow due to high market share while others would follow a normal path.
About the company’s focus on localisation he said that since there were only a few good PCB manufacturers in the world, mostly in Japan and Korea, from where they would have to import, the rest can be localised. The level of localisation could well be at 95 percent.

Guiding Trends

“I would differentiate between what is happening globally with what is happening in India and the Asia-Pacific,” Klein said.
Globally, the chassis is becoming more and more important and the technology portfolio is undergoing a huge transition, he said, adding, “For example, if the powertrain changes, it’s a disruption. Today there is a demand for high-performing chassis. The trend is to have a mechanical chassis to which you can add electro-mechanical systems for road stability, ESP, etc.”
There are other elements of disruption in larger or mega cities where one can see a lot of automotive trends like being comfortable in a traffic jam. A new definition for a chassis is that it should be electrically driven and be smart enough to connect to other vehicles, have advanced primary functions, should be lightweight, contribute to zero emissions and offer additional comfort. “We see this (trend) in the latest SUVs and high-end sports cars on road,” he added.
Talking about other trends guiding the company, Klein said, “If we look beyond current technology, we find that autonomous driving is becoming more and more important. For example, if the steering system fails, how do you bring the car to rest? This is where autonomous has the advantage as all components work together to stop the car.” Now vehicles have both front and rear-wheel steering so if one fails the other can keep the vehicle going.
Diversity of opportunities now influences vehicle dynamics, for comfort, performance or whatever is required to do with it. “That’s exactly where we see the future of the chassis; there is going to be increasing intelligence in the chassis itself combining different functions. Of course, you can’t have everything on the chassis as it would become prohibitively expensive,” he said.
One should see this sort of fully integrated chassis first in the premium car segment but later it would broaden out to the mid-segment where we could offer specific solutions. The company demonstrated this at Las Vegas and Geneva with cameras, radars etc all integrated for autonomous driving. Ultimately, every product will have this from mechanical to electro-mechanical to connectivity for monitoring the chassis. “That’s the challenge for us, to augment intelligence using software and electronics,” Klein said.

Choice Flexibility

Suresh KV, President, ZF India, said all the customer needs to do is provide a framework of fitments which would help ZF in giving him the right solution. This flexibility becomes critical especially in markets where they would have to cater to the entire reach and range of equipment. The chassis has to be flexible to meet the requirements of weight reduction and enhanced performance; the customer should be able to pick and choose what suits him.
When one focuses on certain parameters such as safety, comfort, convenience and connected, there is always a trade-off, for instance, disturbing weight reduction or increase in costs. To tackle this, one has to innovate further.
Klein clarified, “We see that the supplier landscape is pretty much shaken up by technology disruption. Certain suppliers are fully focused on single components; for them it will be progressively more difficult to step up to a system level discussion. The question would be whether they are going down the ladder from Tier-1 to Tier-2 or 3?”
As a supplier, ZF wants to be in control, overseeing everything. Even though a number of technological trends may not have been fully evaluated, the company wants to be ready in case these trends magnify.
“You have to be ready for it, for once it starts you want to be part of the market. We want to be at the forefront of e-mobility while we develop the e-axle, ADAS and everything that contributes to autonomous driving,” he said.
To cut costs and to cover the entire spectrum, the company partners with hi-tech giants from different locations including the Silicon Valley. “We want to stay on top of things to be on a high level with our customers; we want always to be the preferred technology supplier for all verticals that influence vehicle motion. We are ramping up software as much will happen in that area. Concepts like ride sharing and hailing have to be taken into account. For us the future starts now,” Klein said.

India Market

The company is witnessing an increasing demand from India and plans to tap the local teams to fulfill the requirements specific to the Indian market. “That is why we are very particular about the products we bring into the market; only a part of our portfolio will be developed in India, at the same time keeping the global perspective in view,” Klein added.
Product development, of ZF is a function of demand in a particular market, changing regulations and the relevance of usage. “For example, there is no point in talking about autonomously driven robot cabs when lightweighting or transmission or fuel consumption is the primary issue, with the relevant cost connections. That is our approach around the world,” he added.
Two years ago there was the concept of the smart urban vehicle. Will ZF be offering it to the Indian industry as many of the applications would be beneficial to them?“It did attract a lot of interest. So far we don’t see a large volume application for the technology. It was basically about front-wheel steering, 70 degree angle and a combination of rear-wheel steering. We are having discussions with new automotive customers who operate in an urban environment; we would like to see it used there first. Certain companies in Europe use this but volumes are low. However, the idea is very much ingrained now. The limiting factor is that if you need a better turning angle you need to have a battery operated electric vehicle as space would be a limitation for the gasoline or diesel engine. It is a great concept that shows what you can do with electro-mobility. The shape of future cars would depend on the functionalities you want to put into them, always keeping in mind the needs of the environment. In India we are confining ourselves to technologies that would grow successfully in the markets here, partnering with local OEMs,” Klein said.
ZF has had a positive experience in India with a lot of cost benefits to the company. Hesaid that the company has organised itself product-wise, applying the basic concepts of manufacturing.
The flip side to that is that it had to change various partners but it was successful in introducing new operations. The volumes here were lower than elsewhere for ZF, in hundreds, not thousands.
In India it wants to multi-task and to take advantage of the cultural differences here to increase the value-add for products. Now volumes are changing as certain product lines are doing very well. The question is does it make sense to keep a safe thing? One solution doesn’t fit all. As and when a particular volume picks up, it needs to be changed.
One of the things the company wants to do is to restructure itself for the future as change is always constant. “All this is good enough for what we are but not enough for what we want to be. We will change, maybe not in all functions but in certain ones based on customer expectations from our product lines. Customers, like Tata and Mahindra, are changing. Their versatility is so high that we have to change to match that,” he said.
ADAS is considered to be a large ocean with India probably just touching the edge. From that perspective how does the company view the adoption of this technology in India in the mid-to-long-term? “For assisted driving we offera lot of functions that could lead to autonomous driving which is picking up in Europe and North America. We can think of automated ports where you move containers like in the port of Hamburg that is very much automated today with automatic forklifts doing most of the shifting. Full automation will finally come into passenger cars but we would have to take the costs into consideration. However, for assisted driving, costs would be lower than the fully autonomous; in India cost would be a major factor. Geographically, there is more acceptance of ADAS with features that include camera and radar. Comfort and safety features at reasonable costs will always find a market. In India, monitoring urban traffic is a major challenge while control of highways is much easier to master,” Klein said.

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