ZF Commercial Vehicle Control Systems India Limited (NSE: ZFCVINDIA) Q1 2026 Earnings Call dated Aug. 14, 2025
Corporate Participants:
Unidentified Speaker
Sweta Agarwal — Chief Financial Officer
Paramjit Singh Chadha — Managing Director
Shankar Venkatachalam — Head of OE Business
Analysts:
Unidentified Participant
Annamalai Jayaraj — Analyst
Mukesh Saraf — Analyst
Mumuksh Mandlesha — Analyst
Kush Shah — Analyst
Ankur Shah — Analyst
Ajox Frederick — Analyst
Lakshminarayanan — Analyst
Harikrishnan Nair — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the ZF Commercial Vehicle Control Systems India Limited Q1 FY26 post results earnings conference call hosted by Batlivala and Karani securities India Private Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Annamalai Jayraj from Bartliwara and Karani securities India Private Limited.
Thank you. And over to you sir.
Annamalai Jayaraj — Analyst
Thank you. Good afternoon. Thank you for joining us today. And I welcome to users of Commercial Vehicle control Systems India Limited calls to briefly on the Q1FY 202526 quarterly earnings today. The first quarter earnings for FY 2026 will be presented by the management team of inside of Commercial Vehicle Control Systems India Limited. Your host today from instead of commerce with the Central Systems India Limited are Mr. Parangit Chada, Managing Director Nishweta Agarwal, CFO Mr. Shankar, Head OE Business and Yambuta Lakshmi, Company Secretary. I now hand over the call to Mr. Paramjit Sadha who will provide further insight into the results.
Over to you sir.
Paramjit Singh Chadha — Managing Director
Thank you, Jayaraj. Good afternoon to all of you. I warmly welcome you all to ZF Commercial Vehicle Control System India Private Limited Q1 results for financial year 2025 26. This is my maiden call after joining as managing director from the 1st of July. Certain forward looking statements that we will be making today are based on management’s good faith and expectations confirming future developments. As you know, the actual results may differ materially from these expectations because of multiple factors. ZF Commercial Vehicle Control Systems India Limited’s results for the quarter ending June 30th, 2025 were published on August 12th.
They are available on the website www.zf.com under the ZF CVS India Investor Relations Section. We hope that you have had an opportunity to go through that. A transcript of this recorded audio of this call will also be made available on the website www.zf.com under the ZF CBS India Investor Relations section. I am happy to talk to you today as we give you an update about business of the company. By going through first the economic update, then commercial vehicle and then about the company update regarding the industry and economic updates, I would like to start talking about a few key macroeconomic aspects relevant to our industry.
The global environment continues to be challenging. Global growth, though revised upward by IMF remains muted. The pace of disinflation is slowing down with some advance in economy is even witnessing an uptick in inflation. However, the current geopolitical scenario remains volatile and its impact on economy is not very clear. Domestic growth remains resilient and is broadly evolving along the lines of RBI’s assessment. Private consumption aided by rural demand and fixed investment supported by buoyant government capex continue to boost economic activities. On the supply side, a steady southwest monsoon is supporting kharif sowing, replenishing reservoirs, water levels and boosting agriculture activities.
Moreover, service sector activity remains robust. However, growth in industrial sector remain little subdued and even across segment pulled on by mining industry. As for the growth outlook, the above normal southwest monsoon, low inflation, rising capacity utilization and congenial financial conditions continue to support domestic economic activity. The supportive monetary, regulatory and fiscal policies including robust government capital expenditure should also boost domestic demand to some extent. The service sector is expected to remain buoyant with sustained growth in construction and trade in the coming months. Prospects of external demand however remain uncertain amidst ongoing tariff announcements and trade negotiation.
The headwinds coming from prolonged geopolitical tensions persisting global uncertainties in global financial market pose risk to the growth outlook. Taking all these factors into account, projection for real GDP growth for 202526 has been retained at 6.5 with Q1 at 6.5%, Q2 at around 6.7%, Q3 6.6% and Q4 6.3%. Real GDP growth for Q1 2026. Will. Be around 6.6% as projected. The risks are evenly balanced and most of this information is sourced from the RBI Bank. Indian Commercial Vehicle industry situation Depending upon this economic situation is important to be discussed here. In Q1FY25 26, the automotive sector continued an upward trajectory recording a 4.9% increase in retail sales. The Commercial Vehicle CV industry however presented a mixed picture. While retail sales saw a modest 1% growth as per FADA, production of CVs above 6 tonnes surged by around 7.7% maintaining the strong momentum from Q4 of 2024 25. This production boost was largely driven by the pre buy impact of new AC cabin mandate which was started implementation from 7 June 25 for the trucks which notably defined typical seasonal trends where the volumes in first quarter were not used to be so high.
However, the overall CV mix was impacted by a slowdown in the heavy duty segment particularly on the tippers due to a dip in the industrial activity and significant decline in the mining industries. While this production surge may temporarily affect Q2 volume, we remain optimistic about a strong rebound in the second half of the financial year. The upcoming festive season, a favorable monsoon forecast supporting agriculture activities and continued government investments in infrastructure are expected to drive robust demand and sustained growth. Looking ahead, the seaweed industry is poised transformation. Key trends such as the expansion of commerce and adoption of advanced global fleet solutions like adas, E mobility and improvements in road infrastructure will be major growth drivers for commercial industries.
At the same time, high tech focus on sustainability and increasing adoption of cost contract model by state transport undertaking are expected to accelerate the penetration of electric vehicles, especially on the buses side. After this, I to share some insight into these specific initiatives undertaken by Co. During Q1 2526 coming to the OE sales in Q1 2526, our OE sales grew by strong 7.8% in line with the broader commercial vehicle industry performance in the Q1 despite headwinds from an unfavorable model mix and a flat trailer market, we sustained growth through increased penetration of advanced technologies such as AMT which is called automated Manual transmission, then ecaas electronically controlled air suspension and strategic push into E mobility solutions like electronic compressor and EBS called electronic braking system.
Looking ahead, the outlook for CV industry remains optimistic with multiple indicators pointing towards sustained rebound. In anticipation of this upswing, we are executing a series of strategic initiatives aimed at enhancing our competitiveness and unlocking long term value. For example, we are prioritizing the penetration of advanced trailer technologies including Trailer ABS, Trailer EVS and Scala EvoPulse, a telematics solution in alignment with AIs 113 Trailer Resolution and growing demand for safety and operational efficiency demand in the trailer fleets. The upcoming Electronic Stability Control regulation for buses effective September 25th present a significant growth opportunity. We are fully prepared for volume ramp up and have already seen an increase in demand from key customers ahead of the mandate.
Our product launch pipeline remains strong with new introductions such as exhaust brake wall, automatic traction control and expanded adoption of OptiDrive, AMT and OptiRise E cars. We are also deepening our presence in electric vehicle segment with targeted efforts to expand the reach of our E compressor and EVS systems among independent bus manufacturer. Beyond the near term rebound, we also see long term growth drivers emerging from regulatory evolution and rapid adoption of electric mobility. The recent draft notification from Government of India mandating Advanced Driver Assistance system adas including features such as HAS advanced emergency braking lane departure warning system, moving of Information System, MOIS Blind Spot Information System and Driver’s Drowsiness Attention Warning marks a transformative shift for CV industry.
We are actively collaborating with major OEMs to ensure ZF readiness and timely compliances. In parallel, the accelerated production of electric buses presents a significant opportunity for us. Our advanced E Mobility portfolio including E Compressor, ebs, ESC and ECAS positions us as a technology partner in this evolving landscape. These developments underscore our long term growth trajectory and strategic alignment with future of commercial mobility. Coming to Aftermarket Performance Building on our success for the previous financial year, the aftermarket business achieved A growth of 9% over Q1 of 2024 25. This is driven by focused execution across multiple projects in diverse segments.
We continue to strengthen customer relationship receiving repeat orders for adas driver behavior monitoring systems for their employee transport services. We also advanced retrofitment opportunities including trailer ABS system for application on fuel carrier and substitution of industrial compressor with some of our automotive compressor range for industrial use. In the recent and important market development, petroleum companies have issued tenders for LPG transportation contracts with a mandatory requirement for trailer electronic braking system in Karnataka, Gujarat, Assam, Rajasthan and trailer anti lock brake system in other states. This is a regulatory change creating a significant aftermarket retrofitment opportunity in the vehicle which are already on the road.
We anticipate adoption of trailer EVS and trailer ABS solution in financial year 2526, further strengthening our leadership position in trailer safety technology. Regarding exports, in Q1 202526 we saw a decline in export by 11.6% over Q1 2425. The drop in volume is largely attributed to a decline in demand for compressors and braking components from OEM in us the decline was partially compensated by an increase in demand for compressor and modulator doors control system from OEMs in the EMA European market. Looking ahead, the export order book forecast is challenged considering the geopolitical impacts. While this presents a short term challenge, we remain committed to proactively navigating these changes.
Regarding services export, the export of services recorded a growth of 11.9% in Q1 202526 compared to the same quarter last year driven by sustained increase in IT engineering and business services delivered from India to our global center. This reflects India’s strength as a global engineering hub. Our commitment on ESG Also a lot of activities have been done as part of our ongoing commitment to sustainability and operational excellence. I’m pleased to share some of the significant milestones we have achieved in the first quarter of 2526. Our Mbukur Chennai plant was honored with the prestigious CIIEHS Excellence Award in the Gold category, the highest recognition in its class.
Simultaneously, our Mahindra Varsity Chennai plant secured the Silver category award and received a special award from CIA for the best carbon footprint reduction and an acknowledgement of our focused effort towards environmental responsibility. In pursuit to pursuit of operational excellence, we implemented several energy efficiency initiatives and across our sites resulting in an estimated energy saving potential of 4%. These efforts included optimizing compressed air system and reducing idle time for energy intensive machinery contributing meaningfully to our sustainability goals. Further reinforcing our commitment to phasing out fossil fuel. We successfully electrified the canteen operation at the Mahindrabad City Chennai plant.
This transition is expected to save approximately 60,000 liters of diesel and 40 tons of LPG annually, effectively eliminating around 259 tons of CO2 equivalent emission approximately Regarding engineering update, we have commenced pilot production of single tire lift axle for a leading oem, an important step towards commercial rollout. The company is also working with customers on advanced E mobility solutions. During the quarter we inaugurated our state of the art Innovation Lab at the Hardware Design center in Ambatore, Chennai, reinforcing our commitment to advanced engineering and local R and D capability. To support the growing demand for test operations, we have commissioned a 300 kilowatt high tension transformer for our test track for the vehicle testing updates on the manufacturing side, we continue to strengthen our manufacturing capabilities and scale up advanced technology products from our new multi divisional facility at Oragaram.
This state of the art plant is now producing key components such as E compressor and hydraulic ESS for E mobility, a system protect protector, ASP cartridges for Indian OEMs and a range of VLAN products including actuators, brake chambers and automatic slide adjusters for both our domestic as well as export markets. In Q1 2025 26, we successfully launched several new products tailored for Indian truck and trailer OEMs as well as for the aftermarket. These include brake chambers, air dryers, door control system, electronic control units. To support this growth, we are scaling our manufacturing capacities across all the plants for braking system products, positioning ourselves to capitalize on the emerging opportunities.
We have also upgraded assembly lines at our Jamshedpur, Lucknow and Punt Meadow plants, enhancing our manufacturing footprint. These upgrades have significantly improved delivery performance, operational flexibility and customer responsiveness while also contributing to our sustainability goals by reducing transportation related emission and also using recyclable type packaging. On the corporate responsibility side in the first quarter of 2025 26, we continue to progress in our community development and sustainability initiatives. As part of our efforts to promote road safety and enhance public infrastructure, we installed solar powered traffic signals and solar based high MARS slides across Kanchipuram and Junglepattur district.
We are also investing in skill development initiatives to boost employability and empower the next generation of skilled professionals for building future ready talent. Over 200 youth have been trained in foundational manufacturing scale through the National Apprenticeship Promotion Scheme Maps Regarding Awards and recognition, I’m pleased to share that Q1 of 2025 26. Our teams have collectively earned 25 awards and recognitions from esteemed industry forums including CII, ECMA, CVL and QCFI. This outstanding achievement include five national level awards, five regional level awards and 10 state and zonal awards. These accolades are testament to our commitment to excellence, innovation and continuous improvement.
And now moving to the financial performance I would request Shweta Anaral, our CFO to run through.
Sweta Agarwal — Chief Financial Officer
Good afternoon participants. The results of the company were made public at 6.07pm on 12th August 2025. I hope you had had a chance to go through them. I’m pleased to share that we delivered a strong performance in Q1FY 2526. The consolidated revenue for the quarter ended 30 June 25 was 1042.15 crores compared to 971.06 crores in quarter one of the previous financial year, a 7.3% year on year increase. This is the second consecutive quarter where we have exceeded earnings of rupees 1000 crores. Our profitability also grew significantly as the company recorded a profit after tax of 122.38 crores.
This is up from 99.43 crores in Q1 of the previous year representing an impressive 23.23% year on year growth. This is on account of various portfolio and cost management actions taken by the company over the last year. Our profit before tax stood at 19.4% of product sales in Q1FY25 26 and we achieved our highest EBITDA margin of 23.42% in Q1FY25 26. This performance underscores the strength of our business fundamentals, the effectiveness of our strategic initiatives and the dedication of our teams. Our engineering and other services continue to create value for our group customers. Service income grew by 19.19% at 123.2 crores compared to the same quarter of last year.
On the exports we recorded of 11.6% over the corresponding quarter of the previous year, totaling out at 245.5 crores, largely driven by reduction in demand from the US but partially offset by increases from India. I am now handing over to Mr. Chetta for his remarks.
Paramjit Singh Chadha — Managing Director
I would like to end our speech on a high note by reaffirming that ZF CVCS is confidently positioned as a technology leader in future mobility. With strong capabilities in amd, ADAS and E mobility, we are shaping the future of commercial vehicle and driving sustainable transformation across the industry. Thank you very much for your participation and now we welcome the questions.
Questions and Answers:
operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press STAR and one on the Rushton telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is on the line of Mukesh Sara from Mndes Park. Please go ahead.
Mukesh Saraf
Yes sir. Good afternoon and thank you for the opportunity. My first question is on the margins. While we’ve seen gross margin has improved sequentially, the EBITDA margin has kind of come off. So this we’re seeing that employee cost and other expenses have gone up more than the increase in revenue. So could you give some sense on what has led to this increase in these overheads? Is there any one off within these.
Sweta Agarwal
Good afternoon. So we implemented the annual salary division of approximately 7% effective 1st of April. So you see that impact coming across when you’re comparing it to the last quarter. And there was of course a one timer effect of the true down due to differential rate of discounting for the gratuity valuation on 21st of March. So when you are again comparing it to the previous quarter it looks like it’s disproportionately higher. However, this is in line because the gratuity valuation is a one time exercise per year. So that’s why the impact appears as it does.
If you compare it to the same period last quarter, last year, same quarter, the increment would be in line with the annual increments that are given.
Mukesh Saraf
Got it. And okay, okay. Within the other expenses as well there is. There’s nothing to highlight as such.
Sweta Agarwal
Within the other expenses. No, there’s regular warranty freights and so on. So nothing, nothing major as a one time.
Mukesh Saraf
Got it, got it. And second question is on the. Not the escape like you mentioned that from September we are going to see an increase in volumes. Could you give some sense on how much of an increase this could be? What’s the number of sets that we’re probably supplying now for buses on the ESC and how this could go up? And additionally also for the hydraulic ESC, I think we were at about 400 units a month run rate. Could this also kind of see an improvement from September?
Shankar Venkatachalam
Hi, good afternoon, this is Shankar here on the ESC, the nematic ESC, what we are currently supplying to EM, we see roughly the volumes doubling from about 1500 to 2000 pieces per month to about 3500 to 4000 pieces per month. That’s the kind of number that we are looking at come September. We have already started seeing an uptick in the orders coming in from OEMs this month as they prepare for the bodybuilding and readiness of of the vehicles for launch in September. So that’s something that’s already started on the hydraulic side, the impact would also be there, but not to that extent because I believe that some of the school buses and the city buses are still exempted.
So that growth is not seen to that extent in the hydraulic segment. There is a small marginal increase in the numbers that we see on the hydraulic segment.
Mukesh Saraf
Got it, got it. And in some of the previous calls we have mentioned that the trailer ABS as well, we should start seeing an increase in adoption. While this was mandated many years ago, the adoption is quite low and I think in some of the calls it was mentioned that we should start seeing that from this year onwards there’s going to be some push from the ministry as well. So any update on that.
Shankar Venkatachalam
On the trailer abs? We have a challenge because the enforcement is not there at the moment as part of legislation. We find that state transport authorities are still not mandating it. So we are taking it forward as a safety feature and also educating trailer manufacturers that these are the benefits that it can bring them and as well potential ROI and benefits that it can give them while they.
Mukesh Saraf
Sure. And just lastly, if I may, any update on these on the draft regulation that we kind of have in place for the ADAs? I think it is next year, but we haven’t got an update on that as yet as to when that final notification could come.
Shankar Venkatachalam
At the moment it’s still under discussion, as you know, after the draft legislation has come out. Probably OEMs are also in discussion with ACMA. So there is a potential shift of the timeline that we are expecting, maybe to the tune of six months to a year is what we are expecting. But the Exact details will be known once it’s officially out.
Mukesh Saraf
Understood. Great. Thanks a lot. I’ll get back in the queue.
Sweta Agarwal
Thank you.
operator
Thank you. A reminder to all participants, you may press star and one to ask a question. I also request each participant to ask two questions. The next question is from the line of Mumukesh Manlesha from Anandrati. Please go ahead.
Mumuksh Mandlesha
Thank you. Thank you so much for the opportunity. And thanks Paranjit sir for the introduction. So as I said, one question, sir. On the ADAS opportunity, we have been always strong in the heavy commercial vehicle. Now this since the regulation is applicable to some part of LCV and ILCV portion which is less than 15 tonner and more than 3.5 tonner. How do we see our position and presence for this part of the segment for the ADAS function? And also in earlier calls we have indicated 65, 70,000 rupees value for the ADAS content. Just want to check for the LCE part of the market how the content would be different from the heavy commercial part.
Shankar Venkatachalam
On the overall ADAS portfolio. As you know, we are present in the pneumatic portfolio, very strong presence today on the hydraulic portfolio. These are some of the products that we are trying to leverage from our parent company at the moment. The products, what we are have a challenge in terms of being cost competitive in the current market. The cost of the current products which are expected to be are much lower than in the frame of mind. So that’s something that we are trying to evaluate while we look at how the market would tend to take up this product as well.
So once we have better clarity on that, we’ll be able to give that feedback.
Mumuksh Mandlesha
Got it. So our presence would be more on the pneumatic portion of the opportunity for us.
Shankar Venkatachalam
That’s correct. That’s correct.
Mumuksh Mandlesha
Got it. Got it. Thanks for the opportunity, sir. Thank you.
operator
Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of Kushpur Shah from BNK Securities. Please go ahead.
Kush Shah
Yeah, so thanks for the opportunity. So I had a couple of questions. So if you could give us the. Absolute number breakup for OEMS replacement and the export segment.
Sweta Agarwal
Could you repeat your question please?
Kush Shah
I wanted to know the absolute numbers of the quarter for the aftermarket OEMs and the export segment.
Sweta Agarwal
OEM is 463 crores. Aftermarket about 135 crores and exports 245 crores.
Kush Shah
Thank you. Coming to the long term outlook, what. Is our strategy which are taking for. Mitigating the demand cyclicity of the CV industry.
Sweta Agarwal
Just repeat that again please.
Kush Shah
What strategies is ZFC taking to, you know, mitigate or de risk their business from the Indian CV industry? Just slow down. And.
Sweta Agarwal
So kush, we typically would follow the demand cyclicity. This industry itself operates in a particular way. So from a domestic side there would not be many opportunities to not operate within that cyclicity. Aftermarket is the only opportunity where we might be able to find certain segments where we could support even outside the cyclicity, normal oem, large vehicle cyclicity.
Kush Shah
All right, all right. Okay. And for this quarter, I think sir mentioned some new product launches. So if you could elaborate or you know, give some more insights on that and the new product launches.
Paramjit Singh Chadha
So on the new product launches we have in Q1, we have expanded our presence in the E compressors and the EBS systems. This is primarily driven from growth in electric bus segment. So in Q1 we have seen a significant growth in the electric buses and this is driven by independent bus manufacturers. And also we are looking to expand our presence in the AMT segment and position ourselves for launch of new products such as exhaust brake wall, automatic traction control and further growth of ECAs.
Kush Shah
Okay. All right, so that’s it for mine.
operator
Thank you. The next question is from the line of Ankur Shah from Capital. Please go ahead.
Ankur Shah
Yeah, thanks for the opportunity. Ma’, am, just one question on the other income. Any specific reason why the other income was quite up this time?
Sweta Agarwal
Yes, there is a positive impact of FX movement. So the rupee has depreciated against the euro significantly in the last quarter. And since we are a net exporter company, we saw a positive impact on the euro fx.
Ankur Shah
So ma’, am, will this impact continue to stay in the quarters going ahead or the pricing gets adjusted?
Sweta Agarwal
The pricing doesn’t get adjusted, but we don’t see this kind of a volatile movement in the upcoming quarters. Unlikely to happen to this kind of a volatility.
Ankur Shah
Sure. Thank you. And second question is on the other cost, I think one gentleman did ask, but any specific reason why there was such a huge jump on other cost in spite of a 3% top line growth?
Sweta Agarwal
There are a couple of components in the other expenses, one of which is the CSR expenditure. So when you compare it to last year, the CSR expenditure is linked directly to the profitability due to the higher profitability. Therefore you see that component in the other expenses. The second, because there are some previous period reversals that happened in the last year which is making it look as if this year’s other expenses is higher. So otherwise mainly normal business relations.
Ankur Shah
So ma’, am, while we are modeling it out, shall we think of it that you know the quarters coming ahead will be without CSR and normalized.
Sweta Agarwal
The CSR would be spent month on month and therefore that CSR is linked to last year’s performance and would remain similar across the rest of the 3/4 of this year. Next year CSR amount will therefore get linked to this year’s performance.
Ankur Shah
Oh okay, okay, got it. That is very clear. And sir, one last question for you on the business front a very maybe common question that with the clients from the US because I assume that we were expecting some growth with respect to US Exports and with whatever has come up as tariffs. Do we hear from clients or the parent company about change in growth plans, about change in you know, sourcing destination being India or some other market? Because now on a comparative basis maybe European tariffs are quite lower than the Indian ones. So any thoughts over there?
Paramjit Singh Chadha
Yeah, we have already started working on this direction checking at all our supply chain across world. So there are IC export from one country to other. So maybe certain actions like some additional value addition in US and other things can be one of the area which will be worked out. But as of now I would say if you ask me some concrete plans including discussion with the customers is already being worked out and I think it will take some more time to understand what are the overall stand being taken by our customers, global customers that will be and also being our safety critical part, it is sometimes very difficult to change the source very quickly.
So it needs lot of time for reapproval by sourcing the part from other countries. So it’s not so fast that one can do.
Ankur Shah
Sir, just one follow up on that.
operator
Sorry to interrupt Mr. Shah, but I request you to rejoin the queue.
Ankur Shah
Sure.
operator
Thank you. The next question is from the line of Ajax from Sundaram Mutual Fund. Please go ahead.
Ajox Frederick
Hi sir, thanks for your opportunity. My one question is ZF winning three large test system orders for powertrain and tire manufacturing applications. How much of that will proof was and what are the potential here?
Sweta Agarwal
Those products that you’re mentioning are not part of the portfolio of this listed company. Hence I would not be able to comment on that.
Ajox Frederick
Got it. All right, thanks.
operator
Thank you. The next question is from the line of Mukesh Sarah from Avendus Park. Please go ahead.
Mukesh Saraf
Yeah, thank you for the follow up opportunity. There was one more draft notification end of July which specified that for haulage tractors we should have the vehicle location tracking Devices as well as the event data recorders with similar timeline. October 26th and April 27th respectively. So is there an opportunity for us there as well? Because anyways we will be kind of supplying newer components for the ADAS systems.
Shankar Venkatachalam
We do have our own solution, the vehicle Fleet management solution which is already in series for other OEMs. There is also a newly launched platform called Scalar which is the global platform that is being used with all the various options that are available which can be used either as a data ingestion service solution or as a hardware agnostic option as well. So these are potential products that we could look at in the immediate term. So there is already ongoing engagement with each of the OEMs to see which solution fits their price bucket today.
Mukesh Saraf
Got it. And just lastly the export revenues. Could you give a mix of the country wise exposure and how much would you USB now and Europe probably.
Sweta Agarwal
So typically we export about 50% to the US and 50% to the Europe. This time the mix could be 55, 45 but not more than that for now.
Mukesh Saraf
Okay, okay. Okay. All right. Thank you so much.
operator
Thank you. A reminder to all participants, you may press Star and one to ask a question. The next question is from the line of Ankur Shah from Quasar Capital. Please go ahead.
Ankur Shah
Thank you for the follow up question. Just continuing on the export front, we keep hearing that you know the tariff, the customers may ask us to absorb some pricing. So any thoughts over there? Sir.
Paramjit Singh Chadha
We are at present mostly we are supplying to our intercompany unit and the customer dealing is done by them. So I think if there are any thoughts we will get that information. As of now it is only internal discussions and we are trying to calculate the impact and how far customer will reimburse. I think that is to be concluded by our global team and we will get to more in due course of time.
Ankur Shah
Great sir, thank you. All the best.
Paramjit Singh Chadha
Thank you.
operator
Thank you. The next question is from the line of Lakshmi Narayan from Tunga Investments. Please go ahead.
Lakshminarayanan
Yeah, thank you. Mrs. Sadha, I just wanted to understand. What would be your top priorities for zone the next couple of years. And second, you know you have been. With Mark Brin also earlier and after. Taking over zf, what are the areas where you think ZF needs improvement?
Paramjit Singh Chadha
Very difficult question but I will answer it. Thank you for asking this question. It’s almost 42 days I have joined and I have gone through visit of all my units plants across spread across India. Also visited most of the customers. So collecting the data of what all the customer expectations are there. See the auto industry, especially commercial industry needs agility and flexibility on the demand fluctuation. I think that is one area where every OEM is demanding this flexibility and every supplier is working towards that direction. I would say ZF is more, I think attuned to this because of the multi location plants being to the customer units.
So every main customer plant we have our manufacturing unit next to them. So that makes us much more flexible to serve them as compared to our competitor who have units only in one particular two, three locations. So that is one advantage of zwart which we would like to leverage. We are already leveraging it and we will continue. And the second point for the growth is the change in the demand in commercial vehicles as more and more technology is being adopted. Definitely it is mostly driven through the regulations. But there are some very good fleet companies who are demanding safety features.
So our team is in touch with the fleet companies to promote parts which give more safety efficiency. As Shankar has mentioned, we have telematics solution. We are also already having association with one OEM for uptime monitoring through the software based solution. So these are various positive points for ZF to enhance the growth by giving not only brake system, we are now into transmission also and this AMT and other products and then clutches. So many, many products are additional to as compared to the competitors which you mentioned.
Lakshminarayanan
And what would be your key priorities for ZF in the next few years. As you have taken this leadership role?
Paramjit Singh Chadha
That’s what I mentioned that our manufacturing footprint, which we already have some footprint we are studying how do we have more and more closer to our customer to offer the products at a fluctuating demand so that we don’t lose any business to the OEM when the exponential growth happens. So for that we are working on our portfolio management again. And. And technology is another area where our teams are promoting in order to ensure that going forward our vehicle. I would say content per vehicle should increase with these launches of the new technology. For example adas, the content per vehicle will grow exponentially when the adas like items are added into the vehicle.
If you compare the content per vehicle of a European and US vehicle, it is much higher because of various features which are being offered. Even now the ADAS regulation is talking about five type of features. Whereas globally there are up to 24, 25 features. So once they regulatory requirements increase, we are having scalable ADA system and we are ready for the future. So I would say that next few years any regulatory changes, ZF is having that technology already into our portfolio.
Lakshminarayanan
Thank you so much.
operator
Thank you. The next question is from the line of Hare Krishnan Nair from Jyojit Financial Services Ltd. Please go ahead.
Harikrishnan Nair
So thank you for the opportunity. So I just want to know like what is the kit size value that you’re giving to the OEMs right now and could you give some growth prediction on that and my on a medium to long term basis. And the second thing is that other than the US and the Europe, are you planning to expand your presence in other geographical market? Thank you.
Paramjit Singh Chadha
Yeah. Okay. I think Shankar.
Shankar Venkatachalam
So to answer you today we are somewhere hovering between 40 to 44k per vehicle INR per vehicle. And this is again depending on the model mix that we are having. Looking at variations of vehicle model mix, the VPV also changes with potential new technologies that we are looking to launch in the market as well as upcoming eras legislations. I think over the next two years we can hope to grow all the way up to about a lakh of rupees. So that’s the opportunity that presents itself with the technology that we have as well as the potential the market comes across us.
Sweta Agarwal
Your second question with respect to export opportunity. Sorry.
Harikrishnan Nair
Yes, yes, yes.
Sweta Agarwal
Okay. With your question with respect to export opportunities. We do have some small supplies to the Far East, Korea and Japan and as the other other countries mature. But these are still small quantities and depending upon the global portfolio we may be able to supply as the other markets mature.
Harikrishnan Nair
Okay, thank you ma’. Am. That’s all from my side.
operator
Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Paramjit Singh Chadha
Thank you very much for very relevant questions. And we are here to ensure that we grow as the market grows and also grow little higher than the market. These are the targets which we are trying to take for ourselves. And thanks for your support always.
operator
On behalf of Batlivalan Karani Securities India Private Limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines.
Paramjit Singh Chadha
Thank you.