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German car parts maker ZF Group has opened its centre, which will focus on software and mechanical engineering, in the Indian city of Hyderabad.
The India Technology Center (ITC), as it is known, will start with 1,000 engineers but the company expects this to increase to 2,500 over the next three years. ZF now has a total of 14,000 employees in India at 19 sites, but this is the first technology centre it has in the country.
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“Even more importantly, instead of working on traditional mechanical components, three-quarters of the engineers at Hyderabad will be focused on developing innovative electronics and software solutions,” said a ZF Group statement.
ZF chief digital officer Mamatha Chamarthi said the development reflects the move from a hardware-defined world to a software-defined world. “Every feature and product in the car is getting connected and the car itself on a whole is getting connected,” she added.
The automobile industry is in a period of unprecedented change as a result of the digital revolution being felt by all businesses. Cars today are connected to the internet feeding information systems to improve performance and offer additional services.
Meanwhile, the driverless cars trend is rapidly evolving. As a result, the competition is changing for the likes of ZF with companies that were previously seen as being in different sectors now competitors.
“ZF is restructuring itself to become the technology leader that will shape the megatrends of the future – efficiency, safety and automated driving. The long-term objective is Vision Zero – a world with zero accidents and zero emissions – and ZF products are going to help it get there,” said ZF Group.
Chamarthi said software will be the decisive factor, and ZF wants access to India’s rich software engineering resources. “The Indian Technology Center will be rapidly integrated into the engineering ecosystem and will become a pillar of innovation for the company,” she said.
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Peter Schumacher, CEO at management consultancy The Value Leadership Group, said US-based companies started the trend of setting up technology centres in India and European firms are increasingly expanding there.
He said centres in India not only help reduce costs, but gives companies access to talent and innovation opportunities. ... ... .... ... ... .... ... ... ... ... ...
This is another example of large enterprises choosing to open their own operations in India rather than outsource to India-based suppliers. This gives them certainty over the long term rather than a contract period, and gives them control of innovation rather than just meeting contract targets.