ZF Commercial Vehicle control systems India hosted a conference call on July 31, 2023. In the conference call, the company was represented by Mr P Kaniappan – Managing Director and Mr RS Rajagopal Sastry – Chief Financial Officer.

Key takeaways of the call

Management expects CV segment to improve on back of improved fleet utilization, higher replacement demand, government infrastructure spending, E-commerce expansion and government initiatives to promote electrification and sustainability.

In Q1 FY24, growth in aftermarket division was driven by good demand in mining area.

Company received new orders for Driver Assistance Systems (ADAS) and Driver behaviour monitoring system (DBMS) in Q1 FY24.

Company is striving to introduce new business and revenue models through e-commerce.

Going forward, company expects softening of commodity prices, which will in turn further improve its margins.

Adoption of EVs is gaining momentum, especially in the bus segment. Stricter safety norms provide the company with a unique opportunity to work closely with OEMs to penetrate the Indian market and introduce new technologies for the benefit of the end customers.

As ESC (Electronic Stability Control) is regulated for buses in India from April, company expects to improve the content per vehicle.

Company expects ESC regulation to come in truck segment also, which will further provide tailwinds to company’s products.

To improve the collusion mitigation system, the government in planning to implement ADAS (Advance Driver Assistance System) by 2025, which will further enhance the productivity of the company.

In Q1 FY24, exports growth was driven by demand in certain segments like bus compressors and Air Supply Units for BMW.

Going forward, company looks forward to Partner with trailer customers for implementing 100% TABS, penetrating and expansion of Intelligent Trailer Program products and air disc brakes for trailers.

With improvement in infrastructure and express highways, the need for higher capacity engines and higher gear ratio transmission increases which open up opportunities for automated manual transmission controls in heavy-duty segment.