ZF plans continued expansion in U.S. and China

As global demand for drivetrain products continues to grow, ZF is planning to open new plants in the U.S. and China.

Zf Logo Std Blue 3 C

New plants in the U.S. and China, high demand for car driveline and chassis technology, and a healthy upswing in commercial vehicles in the second half of the year have boosted the business of ZF Friedrichshafen AG. The technology company is set to close 2013 with a 10% increase in sales, to an anticipated €17 billion.

“With this pleasing growth rate, we have once again surpassed the average in the industry and further strengthened our position among the world’s leading automotive suppliers,” said ZF CEO Dr. Stefan Sommer at the company’s annual press conference in Stuttgart. Sommer noted that particularly in ZF’s most important market after Europe – North America – the company took a major step forward with the opening of its new plant in Gray Court, SC, in July. In recent years, the company has invested almost a half billion Euros in the establishment and expansion of the production location for 8- and 9-speed automatic transmissions.

ZF also invested more than €1 billion into the Asia-Pacific region in 2013. “With the new production location for passenger car axle systems in Beijing and the expansion of passenger car axle assembly in Shenyang, we have also increased our presence in China,” explained Sommer. Since November, ZF has produced passenger car axle systems in Malaysia – another first for the company. “In the coming years,” said Sommer, “we want to further exploit the market opportunities in these emerging economies in the Asia-Pacific region and successively expand our capacities there.” He said that was why ZF planned to invest more than €1 billion per year in this region over the next few years. “It will be a huge challenge for us, but if we want to be globally successful and supply our customers locally, there is no other way,” said the ZF CEO.

The growth in sales went hand-in-hand with the creation of new jobs. In 2013, ZF hired approximately 5,200 new employees worldwide. This is set to continue to a lesser extent next year – Sommer expects more than 2,000 new jobs in 2014, with one quarter of this total being in Germany. However, sales are anticipated to rise again in 2014 by around 10% – again finishing above the industry average.

Sommer explained that the strong growth in North America and Asia-Pacific would also impact the long-term corporate strategy. “The sales share of North and South America as well as Asia-Pacific will increase from 40% today to more than 50% in 2025.” By this time, company sales should have reached around €40 billion, he said. Important cornerstones of the long-term strategy included boosting electronics and lightweight construction expertise, innovation as well as cost leadership and building an increasingly attractive global brand. “We can only meet these objectives with motivated employees,” said Sommer, “and we need them in Friedrichshafen just as much as in Gray Court, Beijing or Singapore.”