ZF and LiuGong Create New Joint Venture Axle Company

ZF and LigGong have signed a new joint venture to create a wheel loader axle company whose products will be tailored to the requirements of the Chinese market.

At the signature ceremony: The CEOs of LiuGong and ZF, Wang Xiao Hua (11th from left) and Dr. Stefan Sommer (12th from left). As well as Hermann Beck (6th from left), Head of the ZF Business Unit Off-Highway Systems; Klaus Billetter (8th from left), CFO Asia Pacific; Wilhelm Rehm (9th from left), Member of the Board of Management ZF; and Zeng Guang’an (13th from left), Vice Chairman and President of LiuGong.
At the signature ceremony: The CEOs of LiuGong and ZF, Wang Xiao Hua (11th from left) and Dr. Stefan Sommer (12th from left). As well as Hermann Beck (6th from left), Head of the ZF Business Unit Off-Highway Systems; Klaus Billetter (8th from left), CFO Asia Pacific; Wilhelm Rehm (9th from left), Member of the Board of Management ZF; and Zeng Guang’an (13th from left), Vice Chairman and President of LiuGong.
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ZF and the construction equipment manufacturer LiuGong intensify their cooperation by building a new joint venture on September 12. The new company will produce wheel loader axles that are specially tailored for the requirements of the Chinese market. In the long run approximately 190 employees will be working at Liuzhou Axle Co. Ltd. and more than 30,000 of the newly designed axles will be delivered to the joint venture partner LiuGong and the third market. 

Since 1995, ZF and LiuGong have been operating a joint venture company in Liuzhou, one of the most important industrial cities in the south of China. The 300-person company has been successfully serving the joint venture partner LiuGong and the third market with high-quality construction machinery transmissions and axles for years. Now the two parties have decided to further intensity their cooperation in the field of construction equipment axles. On September 12, the Joint Venture ZF Liuzhou Axle Co. Ltd will be launched in the same location.

“Our cooperation with LiuGong strongly shows the ‘Design to Market’ strategy which has been consistently followed by ZF, especially in the field of Off-Highway Systems,” says Wilhelm Rehm, Member of the Board of ZF. He is also responsible for the Industrial Technology Division which includes the Business Unit of Off-Highway Systems. The new axle range will be technically reliable and favorable in price.

“Together with our partner LiuGong, we have developed a product which exactly matches the requirements of the Chinese market,” concludes Rehm.

The joint venture will strengthen ZF’s activities in China. “During the past years, the country has experienced a rapid development of construction machinery,” explains Dr. Stefan Sommer, CEO of ZF. “More than half of the worldwide wheel loaders are produced in China. A considerable amount of machines are also being exported abroad from there. The impressive export rate, in particular, represents a big challenge since it frequently leads to market fluctuations. With the new joint venture company, ZF will continue its growth in China,” says Sommer. “Therefore, we are ideally equipped for the coming challenges.”

Wang Xiao Hua, Chairman of LiuGong, also states, “The new venture will benefit from the many successful years of cooperation already between LiuGong and ZF and by further extending this beneficial cooperation, we will continue to set many things in motion on the fiercely competitive construction machinery market.”

“A team of engineers from ZF Headquarters, LiuGong and ZF China have been working together to upgrade the existing axle models for LiuGong wheel loaders since October 2011,” reports Hermann Beck, head of the ZF Business Unit Off-Highway Systems. “These joint efforts brought about a modular axle concept which, besides the standard version with dry disc brake (Basic Line), offers the possibility to supply a new, even more sophisticated technical solution with wet multi-disc brake (High Line) using a large portion of common parts.” This modular concept will greatly reduce production costs. Currently, 3,300 newly designed axles are scheduled to leave the Liuzhou production plant in 2014. The annual volume will increase to more than 30,000 by 2018. Approximately 190 employees will be working in the newly founded company by that time.

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