India is a reliable partner for us amid global challenges, says Schaeffler CEO

Time of India

4 days ago

The German global automotive and industrial supplier has committed to investing €100 million annually in India over the next five years, while also exploring the prospect of establishing a GCC in the country.
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PUNE: As the geopolitical landscape evolves, marked by tariff tantrums, economic uncertainty, and supply chain disruptions, Germany-based global automotive and industrial supplier, Schaeffler AG , sees India as a reliable partner with significant growth potential worthy of investment. The company has earmarked €100 million (₹900 crore approx, assuming €1 = ₹90) annually for investment in India over the next five years.'In this geopolitical environment with all the tensions and stress in supply chains, with questions of who you are, and who you are going to be friends with, you need to be careful. I think our relationship with India has proven to be strong. We have always seen reliable partners here,' Klaus Rosenfeld , Global CEO of Schaeffler AG, said at a media roundtable held during his week-long visit to India.On Wednesday, the company inaugurated a new manufacturing plant in Shoolagiri, Tamil Nadu, focused on powertrain, chassis components, and advanced technologies. It also operates plants in Pune, Vadodara, and Hosur, along with three R&D centres. Over the last three years, ₹1,700 crore has been invested to enhance local capabilities. Currently, Schaeffler's business in India generates more than €1 billion in revenue.Rosenfeld further noted that the growth observed in India, along with government initiatives in infrastructure development, digitalisation, and investment in AI, all point in the right direction. Compared to other global markets, India offers a particularly conducive environment for growth. 'This is a friendly environment for us, where we feel that we can do much more,' he said.Globally, Schaeffler operates across four main regions: the Americas, Europe, Greater China, and Asia Pacific--a region which is managed from Singapore, chosen for its connectivity and ability to effectively link this diverse and heterogeneous market. However, he emphasised that 'the real place to be' in the region is India.Citing the India-UK Free Trade Agreement as an example, he suggested it could serve as a model for the European Union (EU), adding that he hopes that the EU will 'get its act together' to establish a similarly cooperative relationship. While acknowledging the challenges involved, he emphasised the importance of fostering a friendly and reliable partnership based on win-win outcomes.Interestingly, the slower pace of EV adoption does not appear to be a major concern for Rosenfeld. He believes whether electrification happens faster or slower, customers will continue to purchase vehicles– whether they are electrified or internal combustion engine (ICE) cars. This diversity in demand serves as a hedge for consistent growth.He also identified electric two-wheelers as key to India's mobility future. Less common in Germany but essential in India, this segment will see focused investment from the company.Schaeffler is projecting a global automotive landscape in 2030 where ICE vehicles will account for approximately 30 per cent of the market, with hybrid vehicles and battery electric vehicles (BEVs) each making up around 35 per cent. Regional variations will apply as China, for instance, is already ahead of this curve, with BEV adoption significantly higher than the global average.Another hedge against bad times is vehicle lifetime solutions-- services such as repair and maintenance--as they generate consistent revenue, providing stability during economic downturns. 'In bad times, people don't buy cars. They repair cars," he noted.This strategy is reinforced by its 2023 acquisition of KRSV Innovative Auto (Koovers), a Bengaluru-based B2B e-commerce platform providing spare parts solutions to India's aftermarket workshops.Meanwhile, the CEO envisions Schaeffler being recognised as a Motion Technology company and moving beyond the traditional label of an automotive supplier, which he sees as only half the story. "When you consider our core technologies and the breadth of our product portfolio, it's all about motion," he explained.On global trade tariffs, Rosenfeld noted that we are moving into a multipolar world with the old idea of free trade being clearly challenged. 'For Europe, this is something of a wake-up call. It is ultimately about competitiveness,' he said.Reflecting on the shifting dynamics with China, he added, 'For a long time, Europe and particularly German manufacturers viewed China as a workbench. That perspective has completely changed and the landscape is shifting for global companies like ours.'He believes companies can navigate these changes if they remain open-minded and embrace localisation, which involves real investment in capacity, financial capital, and human capital.On AI, which is fast redefining every domain, he believes, the technology holds significant potential in areas involving transactional tasks, however, large-scale and complex manufacturing processes are unlikely to be fully replaced by AI. In these domains, AI can drive substantial improvements in efficiency and cost-effectiveness, making it a valuable tool for operational optimisation.Meanwhile, Schaeffler is also 'carefully looking' at establishing a global capability centre (GCC) in India, further reinforcing the company's long-term commitment to the country.