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5. ZF Friedrichshafen AG Business Report FY ended Dec. 2019

ZF Friedrichshafen AG Business Report FY ended Dec. 2019

Factors

1) Net Sales
-The Company’s sales for the fiscal year ended December 31, 2019 decreased by 1.1% over the previous year to EUR 36,518 million. Organic sales decrease amounts to approximately 1.9% after adjusting for effects from mergers and acquisitions and positive exchange rate effects. The decrease in sales is primarily due to the economic slowdown in the automotive industry, uncertainties around Brexit and the trade disputes between the U.S. and China.

2) Car Powertrain Technology
-Sales in the Car Powertrain Technology Division for the fiscal year ended December 31, 2019 decreased by 6.0% from the previous year to EUR 7,312 million. The decrease in global vehicle production was the primary cause in the decrease in sales.

3) Car Chassis Technology
-The Car Chassis Technology Division had sales of EUR 7,684 million in the fiscal year ended December 31, 2019, a decrease of 2.4% from the previous year. Again, decreased vehicle production contributed to the division’s decrease in sales.

4) Commercial Vehicle Technology
-In the fiscal year ended December 31, 2019, the Company’s Commercial Vehicle Technology Division had sales of EUR 3,701 million, a decrease of 0.5% from the previous year. Weaker demand in the second half of the year was partially offset by the rollout of a Chinese joint venture and increased general demand for bus technology.

5) E-Mobility
-The Company’s E-Mobility Division had sales of EUR 2,346 million in the fiscal year ended December 31, 2019, an increase of 6.9% over the previous year. Despite the general decline in demand across the industry, demand for electromobility components and systems grew.

6) Active Safety Systems
-The Active Safety Systems Division’s sales totaled EUR 6,303 million in the fiscal year ended December 31, 2019, a decrease of 3.9% from the previous year. The decline in sales was due to the decrease in production of passenger cars.

7) Passive Safety Systems
-Sales of the Passive Safety Systems Division increased by 5.1% over the previous year to EUR 4,337 million in the fiscal year ended December 31, 2019. Increased demand for airbags offset the overall market decline in demand to drive the division’s increased sales.

8) Electronics and ADAS
-In the fiscal year ended December 31, 2019, sales in the Electronics and ADAS Division increased by 10.9% over the previous year to EUR 1,848 million. Increased sales of camera systems drove the division’s increase in sales.

9) Aftermarket
-The Aftermarket Division’s sales of EUR 2,929 million in the fiscal year ended December 31, 2019 decreased by 1.5% from the previous year.

Acquisitions

Acquisition of WABCO (listed in chronological order)
-WABCO Holdings Inc. confirmed that it has been approached by the Company and has engaged in preliminary discussions concerning a potential transaction. There can be no assurance that any agreement will be reached with respect to a transaction or that a transaction will be consummated. The Company further stated that it does not intend to make any additional comments on this matter unless and until it deems further disclosure is required. (From a press release on February 27, 2019)

-WABCO Holdings Inc. announced that it has entered into a definitive merger agreement with the Company. Under the agreement, the Company will acquire all outstanding shares of WABCO, listed on the NYSE, in an all-cash transaction for an equity value of over USD 7 billion. The transaction will bring together two global technology leaders, combining WABCO’s capabilities in commercial vehicle safety and efficiency, including technologies involved in vehicle dynamics control, active air suspension systems, and fleet management systems with the Company’s leading position in driveline and chassis technologies for cars and commercial vehicles. (From a press release on March 28, 2019)

-The Company announced the approval of WABCO shareholders for the proposed acquisition of WABCO. In a shareholder vote on June 27th, 2019, 68.44 % of WABCO’s outstanding share capital voted in favor of the transaction agreed by the Company and WABCO in late March 2019. The Company expects to be able to close the transaction in early 2020. At that time, shares of WABCO’s common stock will no longer be traded on any public market. During the intended integration of WABCO, the central focus will remain on the customers and day-to-day business operations. (From a press release on June 27, 2019)

Other acquisitions
-The Company plans to expand its network of cooperations and investments by acquiring 90% of the shares in Simi Reality Motion Systems GmbH. Simi Reality Motion Systems and its 35 employees have decades of experience in image-based 3D systems for the recording and analysis of human movement. This knowledge is highly valuable in the development of systems for occupant recognition. These systems are a fundamental element for integrated safety in autonomous driving. (From a press release on May 13, 2019)

-The Company acquired a 60% share of 2getthere B.V. 2getthere offers complete automated transport systems and is located in Utrecht, the Netherlands. In the future, the Company and 2getthere will closely work together to further develop technologies for autonomous transport systems. With this strategic investment, the Company is executing its next generation mobility strategy to strengthen its foothold in the Mobility as a Service and automated guided vehicle growth markets, and complements its existing activities. 2getthere’s engineering and software development teams in Utrecht are expected to grow significantly over the next years, approximately doubling the current 60 employees. (From a press release on March 19, 2019)

-The Company announced that it has acquired the automotive division of Romanian engineering service provider BeeSpeed. The incorporation of BeeSpeed Technical Engineering Center S.R.L. as a subsidiary of the Company became legally effective on January 1, 2019. The new subsidiary BeeSpeed Technical Engineering Center S.R.L. employs more than 100 developers at the polytechnic university in Timisoara in western Romania. The Company expects to double that number to over 230 by 2020. BeeSpeed has been working with the Braking System Business Unit of the Active Safety Division since 2008. With the acquisition, the Company is better positioning itself as a systems supplier, not only in terms of software, system testing, and IT, but also with mechanical systems. This also enables it to further expand its expertise in intelligent mechanical systems. (From a press release on January 11, 2019)

Restructuring

-As Haldex’s largest shareholder, the Company announced that it intends to divest its shareholding in Haldex. Through its wholly-owned subsidiary ZF International B.V., the Company currently holds 8.9 million shares in Haldex, representing approximately 20% of Haldex’s outstanding share capital. (From a press release on September 12, 2019)

-The Company’s subsidiary, ZF Steering Gears India, announced that it is planning to sell and transfer the entire investment of the joint venture company Robert Bosch Automotive Steering Private Limited (RBASPL) to Robert Bosch Automotive Steering GmbH at a total consideration of INR 625 million. RBASPL continuously incurred losses from commencement of its activities. The total accumulated losses of RBASPL, as of March 31, 2019, were INR 3,836.9 million. During the 2018-19 financial year, Bosch filed a winding up petition for RBASPL. The Company has also received a Notice from Robert Bosch terminating the joint venture agreement on February 14, 2019. Considering the accumulated losses, uncertainty from the winding-up petition and termination of the joint venture, the Company, as a measure of commercial expediency, decided to enter into an agreement to settle the issues with Robert Bosch and agreed to sell all the said shares of RBASPL to Robert Bosch Automotive Steering GmbH. (From a Notice of Extraordinary General Meeting on June 17, 2019)

Joint Ventures

-The ownership structure of the e.GO MOOVE is also being realigned. In this context, the Company will exchange its shares in e.GO MOOVE GmbH in early 2020 for shares in e.GO Mobile AG. The realignment creates greater synergies in the cooperation between the two companies. The successful cooperation in the development of solutions in the field of transport services for the mobility of the future with the Company as the main supplier for the electric drive, brakes, steering and autonomous technologies will continue. (e.GO MOOVE press release on December 13, 2019)

-The Company and China’s Wolong Electric Group Co., Ltd. have signed an agreement to establish a joint venture that will produce components and electric motors for automotive applications. The joint venture will operate under the name Wolong ZF Automotive E‑Motors Co Ltd. and will manufacture electric motors and components for use in the Company’s driveline systems and the open market. An initial success of this partnership is the award of a major series production contract for electric motor components of hybrid and electric drives. The joint venture headquartered in Shangyu, Zhejiang Province, China, will provide optimal access to the Chinese market, leverage joint purchasing potential and focus on future business. By 2025, the joint venture is expected to have up to 2,000 employees. (From a press release on November 19, 2019)

Business Partnerships

-The Company is partnering with Transdev and e.GO for development of a new shared mobility solution by integrating the autonomous driven e.GO Mover with the operating system by Transdev. The e.GO Moove GmbH joint venture, between e.GO and the Company is providing the e.GO Mover. The Company is equipping the e.GO Mover with electric drive systems, steering systems and brakes as well as its ProAI central computer and sensors which enable automated driving functions. Transdev, through its global autonomous transport system will provide its supervision system, connected infrastructure and client application. The partners will start working together immediately to provide a fully functional solution by 2020, with priority markets in France and Germany. (From a press release on January 7, 2019)

Recent Developments

-The Company’s subsidiary, ZF Transmissions Shanghai Co. Ltd. (ZFTS), recently started production and delivery of 8-speed transmissions (8HP). ZFTS launched operations of a dedicated 8HP production line in the first quarter of 2019 to produce high-quality 8-speed automatic transmissions for customers in China. The plant has an annual production capacity of 400,000 sets. ZF 8HP module components can lower the loss of transmission energy. It adapts to various torque ranges and is suitable for both internal combustion engine vehicles and hybrid vehicles. It has excellent compatibility with standard all-wheel drive and start/stop functions. (From a press release on September 2, 2019)

-The Company is expanding its presence in China to enable the development and manufacturing of its complete product portfolio to fully support the local market. The Company will supply local customers with its flagship product 8-speed 8HP automatic transmission for passenger cars. In the future, the Company will strive to produce purely electric drives in China. The development of production facilities for this goal is currently in progress. To meet local production demand for passenger car electric power steering systems in China, the Company is building a new steering plant in Zhanjiagang. The Company will also serve the commercial vehicle market more locally, as a joint venture with commercial vehicle manufacturer Foton will start production of the TraXon automatic and hybrid commercial vehicle transmission in a few weeks. To support this, a joint production plant has been built south of Shanghai. The Company plans to hire 1,000 additional engineers for two development centers in the Shanghai. (From a press release on April 9, 2019)

-The Company aims to commercialize inverters that utilize silicon carbide (SiC) power semiconductors for mass-market vehicles within three years. SiC power semiconductor inverters are expected to be used for EVs equipped with 800-volt systems. Most conventional EVs are equipped with 300-volt to 400-volt systems. EVs with 800-volt systems are likely to become more commercially available due to their reduced charging times and improved performance. The Company aims create a cost reduction effect for the whole drive system by utilizing the high energy efficiency of SiC power semiconductors, with the aim of mass production. European automakers are expected to start commercial sales of 800-volt EVs in 2019. (From an article in the Nikkan Jidosha Shimbun on March 12, 2019)

Contracts

-The Company and Cree, Inc. announced a strategic partnership to create industry-leading, highly efficient electric drivelines. It will advance electric powertrains with silicon-carbide-based inverters which increase drive efficiency and extend electric vehicle range. Cree’s technology will initially be used to fulfill orders that the Company has already received for silicon-carbide-based electric drives from several leading global automakers. Through the partnership, the Company expects to make silicon-carbide electric drivelines available to the market by 2022. The future use of silicon-carbide-based power semiconductors will increase the range for electric vehicles.  In particular, silicon-carbide technology combined with the 800-volt vehicle electrical system voltage can significantly increase efficiency. Cree recently announced silicon-carbide capacity expansion with a mega materials factory in Durham, N.C. and the world’s largest silicon-carbide device manufacturing facility in New York. (From a press release on November 5, 2019)

-FCA nominated the Company as global transmission supplier for rear-wheel drive and all-wheel drive vehicles with front longitudinal drive configuration. The Company will supply its new 8-speed automatic transmission. The latest version of the 8-speed transmission has been further optimized and features an integrated electric drive for hybrid variants. This is the second largest single order in the Company’s history. The lead production facility for the new, fourth-generation transmission generation, which will start series production in 2022, will be the plant in Saarbruecken. In the future, the Company plans to start transmission production at other locations including the U.S. and China. The new 8-speed automatic transmission can be installed in almost all vehicle segments with a front-longitudinal drive configuration. A technical innovation of the upgraded transmission is the integration of the electric drive.  With this modular transmission concept, manufacturers can easily change from one transmission variant to another, giving them the flexibility to react to market requirements. (From a press release on July 3, 2019)

-The Company announced that its axles have been adopted by the Isuzu Erga Duo and Hino Blue Ribbon hybrid articulated buses. These models were jointly developed by Isuzu Motors Limited and Hino Motors, Ltd., and will be the first hybrid articulated buses made in Japan. The axles used are front, center, and rear axles (RL75A, AVN132, AV133) equipped with disc brakes as standard equipment, which will contribute to smooth driving. These axles have adopted a flat structure to make it easier to board and deboard, with the disc brakes enhancing safety. (From an article in the Nikkan Jidosha Shimbun on June 27, 2019)

-The Company announced it has received a multiple-year order for its enhanced 8-speed automatic transmission. After the new transmission generation starts series production in 2022 at the Company’s plant in Saarbrucken, it will be manufactured in Gray Court, South Carolina, near to BMW’s largest volume production plant in Spartanburg, as well as in Shanghai, China. The latest version of the 8-speed transmission, which has been production since 2009, has been optimized by integrating an electric drive, and also includes a hybrid variant. Michael Hankel, member of the Company’s Board of Management, said, "With a modular construction using various starting elements, the new generation hybrid transmission offers a flexible solution which is suitable for all passenger cars, both conventional as well as electric.” (From a press release on April 4, 2019)

-Alexander Dennis Ltd.’s (ADL) double-decker bus is powered by a fuel cell drive that is equipped with the Company’s AxTrax AVE electric drive axle to prevent local emissions. The Company also provided additional hardware and software solutions for optimum performance. An initial prototype was impressive, operating at high efficiency during field testing. The bus, designed by ADL, is based on its Enviro400 product line. This configuration comprises a secure system that uses hydrogen to generate electricity, which, in turn, drives two electric wheel-hub motors in the electric portal axle. As fuel cells do not utilize fossil fuels, they emit no hazardous emissions, only steam. In addition to the AxTrax AVE, the Company also provided the inverter, the EST 54 electronic control unit and the appropriate control software. In this complete system, the Company optimally aligned performance, efficiency and the service life of the drive. (From a press release on January 15, 2019)

Outlook

-Assuming constant currency exchange effects and excluding the acquisition of WABCO, the Company expects that its sales for the fiscal year ending December 31, 2020 will be between EUR 35 and 37 billion. Note that the reliability of this forecast is lessened due to the impact of the COVID-19 virus.

*From January 1, 2018, the Company applied IFRS 15 for reporting its financial results. 

-The Company aims to spend at least 7% of its sales in research and development annually.

R&D Structure

-As of December 31, 2019, the Company has approximately 19,400 employees working in research and development, including 3,140 engineers and technicians working in basic research and divisional project development.

R&D Facilities

-The Company has 16 main locations for research and development in the following countries:

• Germany: Friedrichshafen, Koblenz, Schweinfurt, Alfdorf, Duesseldorf, Dielingen, Passau, Auerbach
• U.S.: Detroit
• China: Shanghai
• India: Hyderabad
• Poland: Czestochowa
• Czech Republic: Pilsen
• UK: Solihull
• Spain: Vigo
• Japan: Yokohama

-On November 27, 2019, the Company signed an investment agreement with the government of the city of Huadu, Guangzhou, China. The Company will build a new R&D center in Haudu as a base for developing automotive electronics, brakes, steering, safety systems, new energy vehicles, and driverless driving vehicles. This is the Company’s third R&D center in China, and the first in South China, following the ones in the Jiading and Songjiang District in Shanghai. The Company plans to launch the new lab in 2023, after a total investment of CNY 700 million. Also, the lab in Jiading plans to open a branch in Guangzhou to ensure quick customer service. (From a release on November 27, 2019)

-The Company is establishing a technology center for AI and cybersecurity in Saarbrucken. With the new ZF AI & Cybersecurity Center, the Company is now expanding its activities in the area of AI research in order to coordinate and control its AI activities from the new center. The Company plans to establish about two-thirds of its AI specialists at the new location in Saarbrucken. Another third of the experts from the new technology center will focus on cybersecurity. In the future, the new center will do more than drive development for autonomous technologies. The Company uses AI-based functions in a variety of applications including predictive maintenance, intelligent transmission controls and machine learning.(From a press release on March 12, 2019)

-The Company opened the doors of its new testing center for drive technologies. This center provides extended capacities for testing electric, hybrid and combustion engine drives in Friedrichshafen. Battery simulators are used to supply the necessary power to electric and hybrid drives. In this way, the entire power supply for a vehicle can be simulated in the test boxes - whatever the power source. A new office building will be built on the R&D center premises immediately to the east of the testing center keeping with the center’s design. The building will accommodate approximately 400 employees. The construction project is currently in the planning and approval stage. Following a total investment of EUR 70 million in the testing center, the Company is expected to invest a double-digit million figure for the office. (From a press release on February 27, 2019)

R&D Activities

-The Company has joined the Mobility as a Service (MaaS) Alliance. The objective of this special interest group spanning Europe is to bring about a paradigm shift in urban mobility, promote networked mobility concepts, and create uniform standards for technologies and legislation. There is great potential for new providers in the MaaS segment, which focuses on linking public transport and services such as taxis, ride-sharing and bike-sharing providers to form a seamless network. The backbone for this is formed by autonomous and zero-emission cargo and people movers as well as robo-taxis that take passengers to their destinations on demand in the future. The Company offers all the components needed for autonomous people movers from a single source. At the same time, the Company is continuously developing its integrated systems for networked and automated applications. The MaaS Alliance was founded as part of a public–private partnership. Its primary objective is to enable the launch of a uniform and open market for MaaS solutions in Europe and beyond. (From a press release on November 7, 2019)

-The Dongfeng Fengshen Yixuan equipped with the Company’s level-2 highway autonomous driving system succeeded in driving a 500-kilometer driverless section of the G7 Jingxin Expressway between Bayannur and Ejin. It's the first time that the Company’s level-2 highway autonomous driving system partnered with a Chinese brand. This system adopts a solution that combines a millimeter-wave radar and an HD camera. Once a driver sets a driving speed, the car will follow the vehicle in front and will autonomous drive. Also, this system can smoothly move the car from a lane with cars to a lane with no car and adjust its speed. The system can change driving modes from conventional ACC to level-2 autonomous driving freely using a single control. In the fourth quarter of 2020, the Company plans to begin mass production of the level-2 multi-lane autonomous driving systems. (From a press release on September 2, 2019)

-The Company is working together with neuro-technologists from Germany’s Saarland region to investigate how to detect motion sickness at an early stage. This may aid in developing smart driving features to quickly detect symptoms. Everyone reacts differently to vehicle movements, and possesses a unique sense of ride comfort. This fact is reflected in an algorithm based on AI methods that gain information of the physical reactions of each passenger, enabling a personalized profile to be created. As a consequence of this, individual data is obtained for every passenger in a vehicle, meaning that automated vehicles would actually be able to store the preferred driving style of each passenger. (From a press release on July 12, 2019)

Technological Alliance

-Together with Microsoft, the Company intends to bring its software engineering processes, methods and solutions to the speed and quality IT companies lead with. The Company is leveraging Azure cloud services and developer tools as well as Microsoft’s experience in agile software development. In the future, the Company will provide the automotive industry with software solutions. At CES 2020, the Company will showcase its vision of software development with cubiX, a software component that gathers sensor information from the entire vehicle and prepares it for an optimized control of active systems in the chassis, steering, brakes and propulsion. Following a vendor-agnostic approach, cubiX will support components from the Company as well as from third-parties. The Company plans to start projects with first customers in 2020 and will offer cubiX from 2023 either as part of an overall system or as an individual software component. (From a press release on December 19, 2019)

-Oxbotica signed a Memorandum of Understanding with the Company to integrate its autonomous driving software with the Company’s automotive-grade ProAI compute platform and sensor sets. Following comprehensive testing, the integrated system is running on Oxbotica’s test vehicles on public roads around Oxford. Both companies will work closer together on validation and verification of integrated self-driving vehicle systems. The Company and Oxbotica will combine expertise to create self-driving systems which can be industrialized and deployed across different applications. (From a press release on December 12, 2019)

-Israel-based start-up OptimalPlus announced the opening of its German office and a new strategic partnership with the Company to provide lifecycle analytics to bolster the Company’s competence in the area of plant operations management and the enhanced efficiency of ADAS validation operations. The office will serve as a base to enable OptimalPlus to bring its solutions to more companies in the automotive and manufacturing industries in Germany. The Company will leverage OptimalPlus's technology which gathers data directly from the plant equipment, products, and manufacturing systems to drive towards deploying Industry 4.0 solutions throughout its factories. This partnership will allow for a full overview of production, increase efficiency and even perform pre-emptive actions to prevent unreliable components from being deployed, avoiding costly recalls. The strategic partnership is part of the Company’s next-generation mobility solutions to achieve Vision Zero - zero accidents and zero emissions. (From a press release on November 25, 2019)

-The Company and Danfoss Silicon Power GmbH announced a new strategic partnership for silicon- and silicon-carbide power modules. The partners plan to improve the efficiency of electric drivelines by leveraging engineering and cost benefits at the interface between power modules and inverters. The partnership will see the two companies engage in joint research and development, with Danfoss also supplying power modules for silicon applications. One of the first major milestones in this new initiative is a supply contract for Danfoss power modules destined for large-scale Company volume production projects. The Company and Danfoss aim to make a vital contribution to cutting vehicle emissions. In electric and hybrid vehicles, power modules control the efficiency of the energy supply to the drive, battery and onboard electronics. This means that the development of space-saving inverters and more efficient power modules is crucial to reducing emissions over the long term. (From a press release on November 14, 2019)

-The Company announced its strategic collaboration with Israeli technology start-ups Cognata and OptimalPlus for competence in the area of plant operations management, and the enhanced efficiency of ADAS validation operations. The collaboration with Cognata is in the area of ADAS raw data management and transformation. This collaboration will enhance the Company’s capabilities in ADAS data management for validation. The collaboration with OptimalPlus will improve plant performance and jointly bring specialized software products in the future. The Company continually enhances its systems in the areas of digital connectivity and automation in order to allow vehicles to see, think and act. The announcement of the collaborations with Cognata and OptimalPlus underpins the Company’s innovation management process which entails working collaboratively with the technology ecosystem, in addition to its in-house research and development. (From a press release on November 5, 2019)

-The Company has signed an agreement to team with ams, a leading worldwide supplier of high-performance sensor solutions, and Ibeo Automotive Systems, the German specialist for automotive lidar sensor technology to advance solid-state lidar technology for use in autonomous driving and other applications. The three companies will partner on joint R&D efforts to ensure that this technology can be quickly and safely adopted by 2021. ams will provide automotive-grade VCSEL (Vertical Cavity Surface Emitting Laser) arrays and drivers which provide superior reliability and stability compared to competing light sources, such as edge emitters and LED. ams is the first to market with solid-state lidar illumination solutions, meaning no mechanical parts are needed to steer the light beam direction, improving reliability while reducing complexity, size, weight, and cost. (From a press release on May 20, 2019)

-Airbus Defence and Space and the Company announced that they are collaborating to enrich and complement the Company’s on-board system to enhance autonomous driving by using Airbus satellite derived information. Under this collaboration, the two companies are combining their capabilities and expertise to offer a reliable end-to-end solution for self-driving and self-positioning vehicles. Airbus provides its unique high precise Ground Control Points (GCPs), calculated using radar satellite imagery, to support the fusion of Company sensor data. Furthermore, Airbus is investigating generation of HD maps based on aerial and space borne approach, to complement Company semantic cards. Both remote sensed information GCPs and HD maps will be integrated as foundation layers into the ZF AD Environment - an enhanced HD maps solution the Company will present soon - where all needed information for autonomous driving will be implemented in a cloud based system. (From a press release on April 15, 2019)

-On March 6, 2019, the Company’s subsidiary, ZF (China) Investment Co., Ltd. and China Automotive Technology & Research Center Co., Ltd, (CATARC) signed a strategic alliance agreement in Tianjin, China. The two companies will tie up in the areas of research on automotive industry standards and technical regulations, C-NCAP safety standard evaluations, product inspections and certifications, management training, information services, and scientific research projects. They have already worked together so far in several projects in a wide variety of areas such as an organized advertisement, technology exhibitions, and promotions. (From media reports on March 6, 2019)

-The Company announced that it has expanded its partnership with Microsoft to establish one of the most comprehensive digital cloud platforms in the automotive market. The strategic cooperation puts the Company in a position to offer digital services in the areas of automated driving, vehicle motion control, integrated safety and electromobility. The products range from fleet management solutions to predictive maintenance applications and process automation based on the ZF Cloud. In 2018, the Company announced its own IoT platform based on Microsoft Azure. The collaboration with Microsoft allows the Company the development of even more customer focused and tailor-made solutions. (From a press release on January 8, 2019)

Product Developments

e.Go Cargo Mover electric vehicle developed jointly with e.Go Mobile
-On December 13, e.GO MOOVE GmbH, a joint venture between e.Go Mobile and the Company, presented the e.GO Cargo Mover. The Cargo Mover is specially designed for delivery services and craftsmen. Due to the low-floor concept and the cubic design, it offers an above-average interior space and very good accessibility. In addition to the electric drive, the e.GO mover will feature a compact fuel cell range extender. The e.GO MOOVE will complete the homologation of the e.GO Mover with the M2 (People Mover) and N1 (Walk-in Mover) vehicle classes next year. The new assembly plant in Aachen Rothe Erde will begin operations in the second quarter of 2020. In 2020, 250 e.GO movers from series production are to be delivered. In 2021, the company plans to produce more than 2,000 e.GO movers is planned. (e.GO MOOVE press release on December 13, 2019)

Technologies shown at 2019 North American Commercial Vehicle Show
-The Company informed that it will present leading technologies for driver shortage, emissions, efficiency, cost and safety at the 2019 North American Commercial Vehicle Show, including its PowerLine transmission. At the end of 2020, the Company will begin production of PowerLine, a new 8-speed fully automatic transmission for medium-duty commercial vehicles, with a major North American OEM launching in early 2021. Barely perceivable shifts throughout these optimally spread gears enables up to 30% faster acceleration compared to conventional 6-speed transmissions. The best-in-class 8-speed gear layout combined with a cutting edge twin-torsional damper torque converter enables a fuel efficiency improvement of more than 10%, thus significantly reducing greenhouse gas emission. Another system shown is the OnTraX driver assist platform, which offers further capabilities with the addition of short-range radar, including lane change and city drive assist. Side-mounted short-range radars see in the blind spot where the driver cannot. (From a press release on October 27, 2019)

Latest generation EcoLife automatic transmission for buses
-The Company announced the latest generation of its automatic transmission system for buses, EcoLife 2, which will be available by 2020. The most significant improvements include fuel savings of up to 3%. The Company has retained the basic principle of a six-stage planetary gearset with torque converter and primary retarder. Numerous technical modifications optimize the new version of the powershift transmission, allowing an input torque of up to 2,000 Nm which enables smooth gear shifting. Further internal transmission losses were reduced by applying a special coating to the lamellar clutch. The stainless-steel heat exchanger mounted behind the transmission is now triple-ducted, integrating the transmission cooling system and eliminating the requirement for an additional container. The results are weight savings of approximately 10 kilograms and increased ease of maintenance. An EcoLife 2 variant for coaches is also under development, covering the torque range between 1,700 to 2,800 Nm. (From a press release on October 8, 2019)

Technologies shown at Busworld Europe
-The Company is showcasing its extensive portfolio, including the world premiere of the new generation of the EcoLife automatic transmission system and a retrofitting solution for the all-electric CeTrax bus drive at Busworld Europe. The CeTrax electric central drive uses a plug-and-drive approach to allow bus manufacturers to electrify existing vehicle models without major changes to the chassis, axles, structural engineering, or differential gear. The AxTrax AVE electric portal axle is an attractive solution for bus manufacturers. Both products can be retrofitted to existing fleets as well. The EcoLife automatic transmission system reduces fuel consumption by up to 3% and will celebrate its launch at Busworld Europe. Openmatics captures all relevant parameters and diagnostic data from the electric driveline, allowing bus operators to optimize charging infrastructure and plan vehicle maintenance on an anticipatory basis. The Company has also developed a new, cloud-based predictive maintenance program for the EcoLife transmission system, which is used in city buses. (From a press release on October 8, 2019)

Safe Human Interaction Cockpit concept developed with Faurecia and fka
-The Company has developed a Safe Human Interaction Cockpit concept (SHI cockpit) with Faurecia and fka. The SHI Cockpit advises when road traffic conditions permit automated driving. The vehicle can take control once the driver releases the steering wheel. This is sensed by a Hands-On-Detection (HOD) function. Thanks to steer by wire, the steering wheel remains stationary in autonomous mode. In specific scenarios, the SHI Cockpit can give the driver advance notice to resume driving the vehicle. Depending on the situation, the SHI Cockpit provides haptic, visual, and acoustic information. A 3D interior camera measures the driver’s height and individually adjusts the seat and the steering wheel to fit the driver when driving manually. Drivers have a bird’s-eye view of the vehicle on the Head-Up Display Instrument Cluster (HUDIC), which is shown on a monitor centered on the driver’s view. The Active Vehicle Aura (AVA) signifies the effective networking of all assistance systems. The Company holds overall responsibility for the project, and developed and networked all of the new functions. It also contributed to all of the active and passive safety systems as well as to the HOD steering wheel. (From a press release on September 12, 2019)

EVplus electric concept vehicle
-The Company announced that its EVplus concept vehicle runs more than 100 kilometers on EV mode under real-life conditions. The Company is unveiling its EVplus concept at IAA 2019. Its purely electrical range of more than 100 kilometers covers most daily mobility needs of urban commuters, without needing to recharge the vehicle en route. The EVplus concept vehicle is based on a volume production passenger car with an 8-speed plug-in hybrid transmission from the Company. Engineers installed a more powerful battery with a gross capacity of 35 KWh in the mid-range sedan. With 65 kW continuous output and peak output of up to 95 kW, the power of the electric motor integrated into the transmission is equal to the volume production standard. Under real-life conditions, this enables the concept to achieve a pure electric range of more than 100 kilometers on a single battery charge with active systems such as air-conditioning or heating. (From a press release on September 10, 2019)

Fully integrated wheel sensor system developed with Maxion Wheels
-ZF OPENMATICS, a subsidiary of the Company, and Maxion Wheels announced the joint development of the world’s first fully-integrated wheel sensor system. The multi-service Smart Wheel Connectivity Solution will track, analyze and broadcast key data such as tire pressure, temperature, wheel load and other wheel and tire performance metrics to drivers, fleet operators, mobility providers and infrastructure authorities. The new partnership presented its first prototype during the 2019 IAA with the goal to complete feasibility studies during the first half of 2020, followed by real-world testing and validation. The Smart Wheel Connectivity Solution combines Maxion Wheels’ MaxSmart wheel sensor technology with ZF OPENMATICS’ integrated TAG sensor platform. Mounted directly to each wheel rim of the vehicle, the durable Bluetooth tags track humidity, tire temperature, air pressure and vehicle load as well as wheel position, speed and vibration across nine axes. Information is collected in real time and wirelessly transmitted to the vehicle’s telematics onboard unit before being transferred to the ZF Cloud. The data can then be read and analyzed via PC, smart devices or sent to a 3rd party system. (From a press release on September 10, 2019)

Flying Carpet 2.0 chassis concept
-The Company has developed a chassis concept, Flying Carpet 2.0, that connects active damping, braking, and steering systems. The system links advanced sensor systems, a smart control unit, and intelligent actuators. The networked and predictive chassis helps to protect occupants from uncomfortable vehicle movements and lessens impacts from bumps and potholes in the road in a predictive manner. The concept’s core is the sMOTION fully active damping system that uses four actuators to adapt the suspension movements of each individual wheel according to the driving situation and road surface features. To maximize ride comfort for occupants, the Flying Carpet 2.0 concept also includes the AKC active rear axle steering system (Active Kinematics Control) to enhance safety, dynamics, and maneuverability. The cubiX control system is the central network for this smart chassis technology. (From a press release on July 18, 2019)

Two-speed electric drive for passenger cars
-The Company’s new 2-speed electric drive for passenger cars integrates an advanced electric motor with shift element and appropriate power electronics. Vehicles with the new drive system consume less energy, and thus extend their range by up to 5% when compared to a one-speed unit. Its compact design is particularly beneficial for compact cars. The modular design of this unit can also be fine-tuned and scaled up for use in sports and performance vehicles. For vehicle manufacturers, the new 2-speed drive offers two options for improved energy conversion efficiency. OEMs could either opt for extended range while retaining the same size accumulator, or use a smaller accumulator. (From a press release on July 16, 2019)

Next-generation 8-speed automatic transmission for hybrid drives
-The Company has been developing a next generation 8-speed automatic transmission for mild, full, and plug-in hybrid drives. The Company will begin manufacturing the transmission in Saarbruecken, Germany, in 2022. The power electronics are no longer designed as a separate unit, but are instead fully integrated into the transmission housing without increasing the transmission’s outer dimensions. For plug-in hybrids, the electric motor has a maximum power of 160 kW and a continuous output of 80 kW. For mild hybrids, 48 volt drives can be installed on several locations in the driveline such as on the crankshaft and on the input shaft. (From a press release on July 9, 2019)

Technologies shown at IAA 2019
-The Company will show its next-generation mobility solutions at the IAA 2019. The Company is pursuing two directions in electromobility. It is laying the foundation for a new breed of battery-electric vehicles with its new 8-speed automatic gearbox for plug-in hybrids. The new hybrid system enables high performance powered by electricity only. It represents an equally effective alternative to purely battery-powered vehicles in certain scenarios. The Company is also working on improving purely electric drivelines. An important step is the world premiere of its electric two-speed drive system for passenger cars. This compact concept brings together an electric motor producing a maximum output of 140 kW (190 hp), a two-stage switching element, and power electronics. The Flying Carpet 2.0 predictive chassis uses comprehensive sensors and smart algorithms to control suspension, braking, and steering systems. This largely decouples the vehicle superstructure from road unevenness and the dynamic driving effects. This creates increased comfort, improved handling and enhanced safety. (From a press release on July 2, 2019)

Dual-cam two-lens camera
-The Company has developed a dual-cam two-lens camera specifically designed for the commercial truck market and to be used in concert with other Company ADAS technologies. The dual-cam is designed to help meet varying global regulatory requirements and delivers advanced functions such as traffic sign recognition, lane keeping assist and centering and object and pedestrian detection to enable automatic emergency braking. A second lens enables redundancy for Level 2+ functions as it helps ensure the camera can still operate due to multiple optical paths if one lens is blinded. The Company will launch an advanced ADAS system for a major Japanese manufacturer in 2020. The launch will include the Company’s first application for its Image Processing Module where camera images will be processed in a separate unit from the camera housing. (From a press release on June 13, 2019)

Technologies shown at UITP Global Public Transport Summit
-The Company will present its comprehensive portfolio at the UITP Global Public Transport Summit in Stockholm. It will offer electric drive solutions for vehicles of all sizes. The CeTrax electric central drive features a plug-and-drive approach which makes it possible for bus manufacturers to electrify existing vehicles. The AxTrax AVE electroportal axle is an attractive solution not only for OEMs but also for retrofitting existing fleets with electric drives. The Company offers a comprehensive tool for both all-electric and mixed bus fleets in the form of the Openmatics open connectivity platform. The Company has also developed a new, cloud-based predictive maintenance program for the Eco life transmission system, which is the preferred choice in city buses: ZF-DriveLife reliably and comprehensively monitors and analyzes the transmission status. The Company offers the most powerful central computer currently available in the automotive industry in the form of the ProAI RoboThink AI-enabled control box. The Company is working on various autonomous transport systems for future urban mobility. (From a press release on June 10, 2019)

Pre-crash occupant safety system prototype
-The Company presented a prototype for the world’s first pre-crash occupant safety system with an external side airbag. The system has approximately 150 milliseconds to make the decision to deploy and inflate the airbag - roughly the amount of time it takes a person to blink. The pre-crash safety system can reduce the penetration of the intruding vehicle by up to 30%, helping to significantly reduce the occupants’ risk of injury. The vehicle’s sensors first have to quickly and accurately identify a potential impact. This is possible with connected cameras, radar and LiDAR. Algorithms within the system software decide whether or not a collision is unavoidable and whether the deployment of the airbag is both possible and beneficial. (From a press release on June 5, 2019)

Electric light commercial vehicle prototype
-The Company’s subsidiary, ZF Japan Co., Ltd., announced that it has developed an electric light commercial vehicle specifically for the Japanese market. This prototype vehicle has been developed by ZF Japan's engineering team at their Tech Center in Yokohama, collaborating with a team at the Company’s headquarters. The new prototype is made by replacing the conventional ICE driveline of the most commonly used LCVs in Japan with the Company’s CeTrax lite trucks with a 5-ton GVW and load capacity of 2 tons. The CeTrax lite, developed based on the Company’s electric drive for passenger vehicles, is an electric drive for light commercial vehicles with a GTW of up to 7.5 tons. The Company achieved a compact and light driveline unit with a total weight of 120 kg. An asynchronous motor equipped with the prototype truck generates 150 kW and 380 Nm ensuring the same performance level as ICEs. (From a press release on April 23, 2019)

Central electric drive for buses and medium-duty trucks
-The Company announced a new electric central drive for buses and medium-duty trucks. Developed in China with future series production planned in the country, the new unit is designed to meet the specific conditions of the Chinese market and the requirements of vehicle manufacturers there. Designed for city and shuttle buses 10 to 12 meters long as well as medium-duty trucks up to 12 tons, the drive unit meets all the necessary standards for integration into established vehicle platforms. The unit is driven by a permanent magnet synchronous motor. With an output of 170 kW, peak torque of 3000 Nm and a maximum climbing capacity of approximately 15% for buses or 25% for trucks, demanding topographies are no problem for the new drive. The system is designed to fulfill international functional safety standard ISO26262 with level at ASIL-C. (From a press release on April 15, 2019)

ZF coPILOT ADAS system
-The Company announced the debut of ZF coPILOT, an intelligent ADAS system leading to enhanced safety and driving comfort opportunities. ZF coPILOT can be operated with voice commands and is designed to recognize traffic conditions, sense vehicle handling and monitor the driver, helping to preempt hazardous situations through active control intervention. ZF coPILOT is powered by the ZF ProAI central computer and the NVIDIA DRIVE platform. It is designed for volume production and will be available from 2021. The ZF coPILOT demonstration vehicle will be presented for the first time at Auto Shanghai. With the high-performance, energy efficient computation of the NVIDIA DRIVE Xavier processor at its core, ZF ProAI can integrate and completely control the pre-trained algorithms for all driver assistance functions. (From a press release on April 12, 2019)

External side airbags
-The Company has developed external side airbags that can reduce collision impact force by 40% and better ensure the safety of passengers. The airbags are mounted on the frames of the car seats and use precision electronics sensors to analyze data and predict the time for the car to receive the impact. The external airbags are designed to inflate right before the collision to mitigate the impact on the vehicle. (From media reports on February 22, 2019)

ZF ProAI supercomputer
-The Company unveiled the latest model of its automotive supercomputer ZF ProAI just before the start of CES 2019. The latest generation in the ZF ProAI product family comes with its own graphics processor, offers a total computing performance of more than 150 teraOPS, the equivalent of 150 trillion calculation operations per second and can be modularly combined with up to four units, corresponding to a total performance of 600 teraOPS. The ZF ProAI product family offers an open platform for the customized integration of software algorithms, covering conventional functions as well as AI algorithms. The power and flexibility of ZF ProAI also convinced NVIDIA to name the Company one of their preferred partners for the launch of their new Level2+ NVIDIA DRIVE AutoPilot. (From a press release on January 6, 2019)

Technologies shown at CES 2019
-The Company will unveil a steering wheel and pedal-free robo-taxi to show how its technologies enable new forms of urban mobility at CES 2019. The Company offers extensive systems competence to companies offering Mobility-as-a-Service solutions. It includes radar, camera and lidar systems and powerful computers such as the ZF ProAI RoboThink with software and algorithms, as well as mechatronic actuators and safety systems. ZF ProAI RoboThink, the high-performance supercomputer for autonomous driving is designed to process a vast amount of sensor data, translate it into a coherent picture to provide commands for the vehicle. The Trendsetting Cockpit from the Company and Faurecia installed in the CES demonstration vehicle demonstrates where development is heading. It can maneuver without a steering wheel and pedals and is equipped with three screens. (From a press release on January 6, 2019)

Sensor technologies shown at CES 2019
-The Company is highlighting its powerful sensor portfolio which can more accurately detect vehicle surroundings at CES 2019. The entire architecture is designed to address demanding automotive requirements including extreme temperatures and vibrations. These highly advanced sensor systems are also important in helping to comply with future safety regulations and consumer safety ratings. Fitted to the front of the vehicle, the Company’s high-resolution Full-Range Radar is designed for premium ADAS applications, and automated and autonomous driving. The new, high-resolution Solid-State lidar – which the Company is developing together with IBEO – can detect pedestrians and small objects in 3D. The S-Cam4 highlights the further development and expansion of the S-Cam portfolio. A 3D interior camera from can enable new comfort and safety benefits. As part of the Company’s Interior Observation System it can collect information about the size, position and posture of passengers. The massive volume of data generated by the radar, camera, lidar and Sound.AI systems must be translated into a clear digital environment model. For this purpose, the Company has developed the ZF ProAI product family. (From a press release on January 6, 2019)

Patents

-In 2019, the Company filed 3,007 patents, which included 1,979 first filings. 
 

-In the fiscal year ended December 31, 2019, 44.5% was spent on payments in advance and construction in progress, 34.1% was spent on technical equipment and machines, 12.1% on other equipment, factory and office equipment, and 9.3% on land and buildings.

-Geographically, the Company’s capital expenditure in the fiscal year ended December 31, 2019 focused on primarily on Europe, investing 59% of its total expenditure in the region. It invested 21% of its capital expenditure in North America and 18% in the Asia-Pacific region.

-The Company’s capital expenditure in the fiscal year ended December 31, 2019 focused on the expansion of production capacities of existing products and the ramp-up of new products. Specifically, the Company invested in the fields of transmission applications (including hybridization), chassis systems, electronics, damper modules, brakes, steering systems, additional safety technologies, electromobility and autonomous driving. Regionally, the Company invested in its facility in Pilsen, Czech Republic.
 
Investments in E-Mobility division
-The Company has expanded its E-Mobility division with new buildings and locations. It opened a new building for administration, R&D, and sales at the divisional headquarters in Schweinfurt. In Pancevo, Serbia, a new plant for electric drives will begin operations. The new building in Schweinfurt can house approximately 520 employees. The EUR 30 million building is also home to 16 test benches and checking facilities that can be used to test electric and hybrid drives and their components. The Company will primarily produce electric motors, generators for hybrid and electric drives, transmission selectors, and microswitches at Pancevo. This site is already being expanded to meet the high demand for these products. Around 1,000 employees are set to work at the site in the future. Another production location for electric drives is currently under construction in Hangzhou, south of Shanghai, China. This plant is set to go into operation in 2020. (From a press release on June 7, 2019)

Investments outside Germany

<China>
-The Company’s subsidiary, ZF (China) Investment Co., Ltd., and Jiaxing Economic & Technological Development Zone (JXEDZ) signed an agreement for the establishment of an Industrial Park in China. The China Industrial Park in Jiaxing will enhance the efficiency of the Company in supporting its customers and partners and accomplishing its Next Generation Mobility strategy in China. (From a press release on November 22, 2019)

-On May 16, 2019, the Company held a ceremony to mark the start of the construction of a Chassis Components Plant. The Company has already completed the construction of three other plants in Zhangjiagang and launched the production of components for steering, brakes, and safety systems. The new plant will be the Company’s fourth plant in Zhangjiagang. It will be built on a site of 40,000 square meters and create approximately 400 new jobs. The new plant will manufacture control arms, steering knuckles, tie rods, and plastic parts. The Company aims to begin operations at the new plant in July 2020. (From media reports on May 20, 2019)

-The Company and Beiqi Foton Motor Co., Ltd. established two joint ventures to manufacture transmissions for commercial vehicles at the end of 2016. On April 18, 2019, one of the joint ventures, ZF Foton HCV Automated Transmissions (Jiaxing) Co., Ltd., officially launched its operation. It held a ceremony to celebrate the launch of production, and released Traxon, the latest automatic transmission for heavy-duty trucks. The Company owns 51% of the joint venture while Foton owns the remaining 49%. Traxon has several advantages such as a very high transmission efficiency of 99.7%, a capacity to support high torque and high output at the same time, and lower noise for broader shift coverage. It also boasts improved credibility and high B10 life that exceeds 1.6 million kilometers. It can be used with dry clutches as well as hybrid modules, dual clutch modules, and transmission clutches. Ownership of another joint venture, Foton ZF LCV Automated Transmissions (Jiaxing) Co., Ltd., is divided such that the Company owns 40% and Foton owns 60%. It manufactures transmissions for light-duty commercial vehicles. (From a press release on April 19, 2019)

<Vietnam>
-The Company officially inaugurated its first plant in Vietnam, which will produce chassis modules for cars at the northern Hai Phong port city. The facility, located in Vinfast's 70-ha Supplier Park of Vinfast Manufacturing Automobile and E-scooter Plant produces just-in-time chassis modules for a local automotive manufacturer. The Company has invested more than EUR 25 million in the site. Series production started at the end of July. The newly opened factory is an important link in the Vinfast production value chain, helping to ensure the supply of components and increase the localization rate for Vinfast products. (From a press release on November 11, 2019)

<India>
-In its FY 2018-19 annual report, ZF India said that it has acquired on lease basis, an industrial plot, measuring 26,246 square meters, at Pithampur, District Dhar, Madhya Pradesh, to establish a second manufacturing facility for automotive components. The factory building is ready, machinery is being installed. Operations are expected to begin by the end of September 2019. This will add 300,000 units to ZF India’s annual production capacity and also bring the company closer to some of its major customers. Total investment at the Pithampur factory is expected to be approximately INR 1,750 million. (From ZF India annual report FY 2018-19)

-Rane TRW Steering Systems Pvt. Ltd., a joint venture of Rane Group with the Company, started a new facility for occupant safety products at Tiruchirapalli, Tamil Nadu. The new facility will address the expected market demand and add capacity to localize laser cutting of fabrics and airbag cushion manufacturing for local markets and exports. The company has invested INR 400 million in the new facility. Initial yearly production capacity will be approximately 0.5 million airbag modules and 1 million seat belt assemblies. Production will be ramped up to 1 million modules per annum of airbags and 2 million units of seatbelt assemblies in next two years, using an additional investment of approximately INR 250 to 300 million. (From a press release on February 12, 2019)

-The Company announced the groundbreaking of the Pune plant extension. By the year’s end, a new production complex with 4,000 square meters will be completed and offer additional space to accommodate further production and warehousing activities. Chassis modules, truck and van driveline systems as well as powertrain modules for passenger cars will be produced at the expanded plant from 2020 onwards. The current facility with its 16,770 square meters built-up space is fully utilized with today’s commercial vehicle, car powertrain and aftermarket business. (From a press release on February 5, 2019)

<Austria>
-The Company is planning to increase capacity in its Lebring, Austria plant for Active Kinematics Control (AKC) systems. The Company has produced a total of 500,000 AKC systems at Lebring, Austria in under six years of production. Currently, around 1,000 AKC systems are produced daily. The Company is planning a considerable increase in capacity over the next few years to meet demand. To support this, a new, third production line was installed recently. Another assembly line is already in the planning stages. In the long term, this will enable the Company to produce more than one million AKC systems per year. (From a press release on June 26, 2019)

<Serbia>
-The Development Agency of Serbia announced that the Company opened a transportation components factory at the industrial zone in Pancevo. As previously announced, the plant will initially employ 300 workers and grow to 1,000 employees in the future. This factory will produce electric motors, electric machines, generators for hybrid and electric drives, switches for gearboxes and micro switches. Due to high demand, the plant’s premises will be expanded from 25,000 to 60,000 square meters. The Company also plans to build a scientific research center spanning 5,000 square meters. (From an article of Development Agency of Serbia on June 13, 2019)