ZF India is set to sharply ramp up its sourcing footprint in the country, quadrupling the value of components procured from local suppliers to ₹25,000 crore in the coming years, up from the current ₹6,500 crore. The move underscores the German auto component giant’s increasing reliance on India as a global hub for both internal combustion engine (ICE) and electric vehicle (EV) technologies.
Akash Passey, President of ZF India, said the company is preparing to expand its supplier network from 700 firms at present to more than 2,000, as part of a wider localisation and export-led growth strategy. “Today we do about 6,500 crores out of India and we’re aiming to do 25,000 crores of sourcing… which means we have today 700 suppliers and probably go to 2,000 plus suppliers,” he said during the Automotive Component Manufacturers Association’s (ACMA) 65th Annual Session in New Delhi.
Passey argued that India is emerging as a rare growth market at a time when global automotive volumes are under pressure. While many developed economies are winding down ICE-related investments, India and several other regions continue to offer significant opportunities. “ICE is the biggest opportunity for us… things like ADAS coming in, bigger transmissions, not just in passenger cars but also in trucks, buses, and construction. Each of these areas, at least in our country, is going to have 50 to 100% growth in the next five years,” he noted.
ZF is considering moving some of its 162 global plants to India, allowing it to build scale and then supply to international markets such as the Middle East and Africa. Passey said ICE will not fully disappear worldwide, even if many regions are targeting phaseouts by 2035, making India a critical hub for both legacy and emerging technologies.
Highlighting the company’s priorities, he said ZF’s India strategy rests on four pillars: sourcing, local manufacturing for both domestic and export needs, engineering and prototype validation, and talent development. He also underlined the importance of preparing the supplier base for future technologies.
On whether the future belongs only to large, vertically integrated suppliers, Passey stressed that size alone is not decisive. “It’s not about big or small, it’s about keeping your eyes open, be resilient, be agile, be ready for change… It is the age of collaboration. This is the age to work with startups. This is the age to work with other partners,” he said.
“In today’s world, size doesn’t matter as much as category, product, and leadership. Many car brands that once didn’t even exist are now global giants. And we’ve all seen the Kodak story — a reminder of what happens when you fail to adapt,” he said.
Passey acknowledged that global markets are under stress, with 2025 shaping up worse than an already difficult 2024. But he contrasted that with the outlook in India, where volumes and government-led initiatives under Viksit Bharat are creating opportunities. Passey said the company is also investing in sustainability, with all 19 of ZF’s plants in India expected to transition to 100% renewable energy by the end of this year, as part of its global carbon neutrality goal for 2040.
“We all are sitting on an opportunity to grow the market. So we must make the best use of it, whether as ACMA we are Indian or international players,” he said.