ZF Commercial Vehicle Control Systems India Ltd (formerly Wabco India Ltd) will invest ₹150 crore in capacity expansion through a greenfield venture near Chennai to cater to export and domestic demand.
The company will build a new factory on Chennai’s manufacturing corridor Oragadam on a 44-acre site.
“Our Mahindra City SEZ factory, which is meant for exports, is running at full capacity now. So, the new factory will focus on catering to exports as we have secured more orders now. It will also cater to some domestic demand,” P Kaniappan, Head of Commercial Vehicle Solutions in India, told BusinessLine.
Construction work for the factory is expected to commence by the end of this month or early April. It is expected to start production by Q1 of 2023. The facility, when operational, will essentially manufacture advanced braking system parts. However, with the global merger of Wabco and ZF, the group plans to bring some new products to the Indian market and those products will also be produced out of this facility.
The company will also be positioning the new investment under the PLI scheme as it will be localising some advanced technologies in the electric vehicle domain and some advanced braking system components. “Also, it will be eligible for concessional corporate tax benefit as per the government proposal,” said Kaniappan.
“To start with, the new production is expected to add an incremental revenue of about ₹700 crore as we will continue to expand the capacity,” he added.
ZF Commercial Vehicle Control Systems India Ltd is part of ZF’s new Commercial Vehicle Solutions (CVS) division.
Headquartered in Chennai, the ₹1,864-crore ZF Commercial Vehicle Control Systems India employs about 5,000 people and is a market leader for advanced braking systems, conventional braking products and related air assisted technologies and systems in India. Its Indian operation comprises five manufacturing facilities, an advanced technology development centre, a vehicle testing facility and a nationwide aftermarket distribution and service network.
Wabco India Ltd became part of Germany’s ZF Group in May 2020 following ZF’s acquisition of Wabco. The group launched its Commercial Vehicle Solutions (CVS) division on January 1, 2022, to become a preferred global technology partner to the commercial vehicle industry.
ZF CVS division combines ZF’s expertise in the commercial vehicle industry and will significantly advance solutions for safe, sustainable and digitised transport. The new division unites ZF’s former Commercial Vehicle Technology and Commercial Vehicle Control Systems divisions, which was formed from ZF’s May 2020 acquisition of Wabco.