ZF Business Report FY2007
Business Highlights
Financial Overview
Sales distribution by sectors, Consolidated ZF Group
Factors
1)
-The Consolidated Group increased sales in 2007 by 8.5 % to euro 12,649 million. The sales percentage in Consolidated Group sales with products for passenger cars and light commercial vehicles in Consolidated Group sales fell back to 62%, while the share for heavy commercial vehicles rose by 2 percentage points to 24%. Other business units were active and its sales percentage rose slightly to 14%.
-The distribution of sales between driveline technology and chassis technology products was balanced at 51% to 49%.
2)
-Sales in the Car Driveline Technology division grew by 4.6% to euro 2,070 million. At the locations in Saarbruecken, Brandenburg and Shanghai, 1.3 million automatic and manual transmissions were produced.
-The ZF Getriebe GmbH, Saarbrucken plant, sold approx. 1,058,000 automatic transmissions 窶 an increase of 3 %. Sales rose accordingly to euro 1,840 million. The sales increase can be credited to the customer's steady export-generation automatic 6-speed transmissions.
-Compared to the prior year, the plant in Brandenburg recorded 4 % decline with the supply of 252,000 manual transmissions. Sales totaled euro 270 million.
-The ZF Transmission Co. Ltd. in Shanghai produced automatic 5-speed and 6-speed transmissions in 2007.
-In Saarbrucken the share of second-generation automatic 6-speed transmissions was to 44% in 2007. This new transmission launched on the market in 2006 that enables combustion engines and diesel engines to consume up to 3% less fuel and to save up to 6%, respectively received positive feedback.
3)
-Sales in the Car Chassis division dropped by 1.9% to euro 2,285 million. Returning the responsibility for purchased parts to a customer's governance was a major reason for the sales decline.
-New production plants which met or exceeded planned production volumes in China in 2007 include ZF Fawer Chassis Technology Co. Ltd. (Chanchun) with the assembly of front and rear axle systems for Audi and ZF Lemforder Automotive systems Co. Ltd. (Shenyang) with axle assembly for BMW.
-At ZF Lemforder Australia Pyt. Ltd., the assembly of axle systems for GM Holden was raised with the scheduled increase of more than 600 axle sets per a day. Control arm production for GM Holden in Australia reached the volume production level.
-The axle assembly plant in Great Britain supplied the one millionth sets of corner modules to Land Lover.
-ZF Lemforder Chicago LLC lagged considerably behind planning after a customer reduced order volumes.
-ZF Lemfoerder Chassis Technology Korea Co. Ltd. (Gumi-City) exceeded the planned production volumes.
-ZF Lemforder Corporation for chassis components (Newton, North Carolina) attained the planned volume.
-ZF do Brasil Ltda.(Sorocaba-SP) increased sales for chassis components.
-The Gearshift Systems business unit attained a sales growth of 14% to euro 190 million in 2007.
4)
-With growth of 17.4%, sales in the Commercial Vehicle and Special Driveline Technology division recorded sales of euro 2,085 million.
-Truck Driveline business unit increased sales by 25% to euro 1,543 million
Further penetration of the Western European market with the automatic AS Tronic transmission range in the heavy segment as well as the steep ramp-up curve of the AS Tronic mid and AS Tronic lite model ranges introduced in 2006 led to this above-average growth.
-Manual transmissions in the heavy and mid-size class benefited from the strong demand in Eastern Europe and Asia.
-The locations in Russia and China registered strong growth.
-In South Korea, the new manual 6-speed transmission generation of the Ecolite type was successful.
-In 2007, the Bus Driveline Technology business unit increased sales by 18% to euro 391 million. The major growth driver was the automatic Ecomat transmission. The major orders were mainly acquired in Asia.
-Despite the continuously difficult market environment in North America, the Pickup/Van Driveline Technology business unit was able to maintain the level in 2006 with total sales of euro 132 million. Business in the European and Japanese markets developed positively.
-The Special Driveline Technology business unit, which includes the military vehicles and special vehicles for civil purposes, rail vehicles, and industrial drives product segments, recorded a sales increase of 25% to euro 177 million.
5)
-All business units in the Off-Road Driveline Technology and Axle Systems division contributed to the sales growth by 10.9% to euro 1,876 million.
-The CV Axle Systems business unit increased sales by 13% to euro 218 million. Transfer cases experienced two-digit sales growth by the selling success in China.
-The continuing boom in the commercial vehicle segment, especially in Western Europe, boosted sales of the Commercial Vehicle Chassis Modules business unit by 14% to euro 30 million.
-After years of development with high growth rate, the Passenger Car Axle Drives business unit entered the consolidation phase. The prior year's sales figures were exceeded by 3% at euro 350 million.
6)
-Sales in the Powertrain and Suspension Components division grew by 12.3% to euro 2,386 million, which was supported by the better market penetration of technologically more demanding products. Both the domestic and foreign business grew likewise.
-In Germany, ZF Sachs benefited from the continuously good economic situation for commercial vehicles and the export success of German vehicle manufacturers. Pleasing sales increases were also with Asian customers, but business development in North America was inconsistent.
-The Powertrain Components business unit recorded an increase in sales of 16% to euro 1,213 million. Demand for dual mass flywheels and wear-adjusting clutches exceeded the level of 2006. Intense development work on hybrid modules for European customers was successfully performed for both the passenger car and the commercial vehicle sector. Moreover, the production launch of new generation torque converters was successful. The outstanding properties in terms of torsional vibration decoupling contribute to fuel savings and CO2 reduction. During 2007, the business unit profited from the good commercial vehicle business. The integrated pneumatic clutch actuation system for heavy commercial vehicles established as a system supplement for clutches and dual mass flywheels.
-The Suspension Components business unit grew by 10% to euro 1,338 million despite continuously difficult framework conditions. Sales increases in all product segments except for the leveling system contributed to the positive figures. In the passenger car sector, sales of the CDC electronic damping system rose considerably. New market segments for sports utility vehicles were opened up. New projects were acquired thanks to technically advanced products such as stabilizer for the ARS hydraulic Active Roll Stabilization system. The amplitude-selective damping was used as a standard feature in mid-size car in 2007.
7)
-Sales in the Rubber-Metal Technology division increased by 1.2% to euro 521 million because of the good development in Europe and continuous growth in South America. On the other hand, sales in North America stayed behind plans as a result of the weak market.
8)
-ZF Lenksysteme GmbH stepped up sales by 11.8% to euro 2,625 million in 2007. 50 % of sales are included in the Consolidated Financial Statements of the Company.
-Sales were divided between the business units as follows:
- The largest sales increase was recorded abroad and the strongest sales driver was the Servolectric electric power steering for passenger cars. In 2007, the five millionth unit was manufactured since production launch in 2002. The share of electric power steering in the Car Steering Systems business unit amounts to 47%. Sales with hydraulic steering systems experienced a slight increase.
Business Overview by Region
-Europe made up 72% of consolidated group sales: 67% in Western Europe and 5% in Eastern Europe. The Company noted sales growth by 8.0% to euro 8,469 million in Western Europe and by 9.9% to euro 601 million in Eastern Europe due to the favorable economic conditions in the commercial vehicles and construction machinery segments as well as the export success of the European customers.
-In Russia, sales of the joint venture OOO ZF Kama in Naberezhnye Chelny increased significantly.
-Sales in North America reached euro 1,279 million for 10% of the consolidated group sales in 2007. The Company faced difficulties of declining sales of traditional US customers who lost market shares to Asian manufacturers.
-Sales in South America increased by 29.5% to euro 478 million due to the positive trend with commercial vehicles and agricultural machinery as well as the business for powertrain and suspension components for passenger cars and light commercial vehicles.
-In the Asia-Pacific region, the Company recorded the largest sales growth by 45.9% to euro 1,627 million, which represents 12.9% of consolidated group sales.
-China experienced a sales surge because of the good economy in all industries and the market success of customer VW. The Company has 19 production companies and the engineering center in Shanghai.
-The plant for passenger car axle systems production in Australia was commissioned for customer GM Holden in 2007.
-In India, the activities in the Commercial Vehicle and Special Driveline Technology and Off-Road Driveline Technology and Axle Systems divisions were continued. The Company is currently setting up a sales office at the Pune location.
Contracts
-In 2007January, the Company announced that it supplies its 6-speed automatic transmission to Maserati's Quattroporte sedan. Along with the 6-speed automatic transmission, the damping system CDC allows for comfortable and safe driving.
-In 2007 January, Iskra Avtoelektrika and ZF Lenksysteme, Germany, signed a five-year agreement for manufacture and supply of electric motor starters for the power-assisted steering wheels that are installed in all Opel models on the Astra platform.
-In March 2007, the Company announced that it supplies specially modified dampers and shock absorbers to Nissan's new Crossover "Qashqai."
-In March 2007, the Company announces that it supplies its 6-speed transmission to the new Maserati Granturismo. The 6-speed automatic transmission can adapt from rapid, sporty gear changes to comfortable shifts, depending on driver preference. The electronic damping system, CDC, contributes both to safety and dynamic performance, because the system adapts the suspension to specific driving conditions.
-In March 2007, the Company announced that it supplies its axle and angle drives, the differential as well as the propshaft to Alfa Romeo for its Alfa Spider models. The driveline components of the Alfa Spider come from the Company's axle drive plants in Gotha and Thyrnau. In addition to the four-wheel drive components from Bavaria and Thuringia, twin-tube dampers at the front and rear axle produced by ZF Sachs lead to optimum road contact. The package is rounded off by a precise, hydraulic power steering gear and a steering pump by ZF Lenksysteme.
-In June 2007, the Company announced that it supplies Torque Vectoring rear axle drive to BMW vehicles. It leads to noticeable added value, both for drivers of all-wheel drive and rear-wheel drive vehicles.
-In October 2007, the Company announced that ZF Sachs, the Company's Powertrain and Suspension Components division, has been supplying dampers for Nissan's global C platform. It all started with the QASHQAI: The cross-over was the first vehicle by the Nissan company with ZF Sachs dampers. Now, four more vehicles, X-TRAIL and the Rogue from Japanese production, the Renault-Samsung QMX, and/or Renault Koleos, which are made in Korea, are added, which are all based on the same global C platform. ZF Sachs supplies suspension struts for the front axle and twin-tube dampers for the rear axle. The dampers for Japan and Korea are supplied by the ZF location in Korea, the ones for the QASHQAI, which is manufactured in England, come from the plants in Spain and Turkey. The scope of supply amounts to a total of 2.4 million dampers per year.
Outlook for FY2008
Overall
-The Company aims at achieving a more balanced sales distribution among the major market regions. Necessary investment to the emerging markets will have high priority in 2008.
-The focus on capacity expansion and production preparations for new products in Europe will be strengthened in 2008.
Car Driveline Technology
-For the coming year, the Car Driveline Technology division expects an increase in sales of 5 %, which is slightly above the industry average.
Car Chassis Technology
-In the year 2008, the Car Chassis Technology division expects major challenges similar to those in 2007. Due to the time lag between the phasing out of axle orders and the later launch of follow-up axle projects, a sales decline of 12% is expected.
Commercial Vehicle and Special Driveline Technology
-The Commercial Vehicle and Special Driveline Technology division expects sales to grow by 10%. Growth drivers are the volume increases for the manual transmissions of the Ecosplit range, automatic transmissions of the AS Tronic range as well as in the segment of mid-size product ranges for the different customers. At the Friedrichshafen and Eger(Hungary) locations, investments of more than euro 200 million are scheduled.
Off-Road Driveline Technology and Axle Systems
-In an overall still positive economic environment, the division is anticipating further growth of 6% in 2008. This forecast is supported in particular by the development of the Asian market and the good positioning with local production in this region.
Powertrain and Suspension Components
-In 2008, the division is expecting 5% growth. Technologically demanding products such as hybrid modules and torque converters for the new generation of automatic 8-speed transmissions and the further rollout of the Global Performance System will make their contributions to the reinforcement of competitiveness and the revenue position. The consolidation and the expansion of capacities in North America are continued on schedule. The plants in Levice, Slovakia will help push market expansion in Eastern Europe.
Rubber-Metal Technology
-In 2008, the Rubber-Metal Technology business unit anticipates sales at the level in 2007. The price pressure from automotive manufacturers and the additional price increase expected for the raw material markets will lead to raising the production share in best cost countries. The business unit will expand its presence in growth markets with Asian manufacturers.
ZF Lenksysteme GmbH
-ZF Lenksysteme expects sales at the same level in 2007.
| (in millions of euro) | FY2007 | FY 2006 | Rate of change (%) | Factors |
| Overall | ||||
| Sales | 12,649 | 11,659 | 8.5 | See note 1) below. |
| Sales by segment (Automotive related segment) | ||||
| Car Driveline Technology | 2,070 | 1,979 | 4.6 | See note 2) below. |
| Car Chassis Technology | 2,285 | 2,329 | (1.9) | See note 3) below. |
| Commercial Vehicle and Special Driveline Technology | 2,085 | 1,776 | 17.4 | See note 4) below. |
| Off-Road Driveline Technology and Axle Systems | 1,876 | 1,692 | 10.9 | See note 5) below. |
| Powertrain and Suspension Components | 2,386 | 2,125 | 12.3 | See note 6) below. |
| Rubber-Metal Technology | 521 | 515 | 1.2 | See note 7) below. |
| Steering Technology (ZF Lenksysteme GmbH) | 1,313 | 1,174 | 11.8 | See note 8) below. |
Sales distribution by sectors, Consolidated ZF Group
| Sectors | Rate |
| Cars and light commercial vehicles < 6 t | 62% |
| Commercial vehicles > 6 t | 24% |
| Others (Construction, Agricultural, Marine craft, Aircraft etc) | 14% |
Factors
1)
-The Consolidated Group increased sales in 2007 by 8.5 % to euro 12,649 million. The sales percentage in Consolidated Group sales with products for passenger cars and light commercial vehicles in Consolidated Group sales fell back to 62%, while the share for heavy commercial vehicles rose by 2 percentage points to 24%. Other business units were active and its sales percentage rose slightly to 14%.
-The distribution of sales between driveline technology and chassis technology products was balanced at 51% to 49%.
2)
-Sales in the Car Driveline Technology division grew by 4.6% to euro 2,070 million. At the locations in Saarbruecken, Brandenburg and Shanghai, 1.3 million automatic and manual transmissions were produced.
-The ZF Getriebe GmbH, Saarbrucken plant, sold approx. 1,058,000 automatic transmissions 窶 an increase of 3 %. Sales rose accordingly to euro 1,840 million. The sales increase can be credited to the customer's steady export-generation automatic 6-speed transmissions.
-Compared to the prior year, the plant in Brandenburg recorded 4 % decline with the supply of 252,000 manual transmissions. Sales totaled euro 270 million.
-The ZF Transmission Co. Ltd. in Shanghai produced automatic 5-speed and 6-speed transmissions in 2007.
-In Saarbrucken the share of second-generation automatic 6-speed transmissions was to 44% in 2007. This new transmission launched on the market in 2006 that enables combustion engines and diesel engines to consume up to 3% less fuel and to save up to 6%, respectively received positive feedback.
3)
-Sales in the Car Chassis division dropped by 1.9% to euro 2,285 million. Returning the responsibility for purchased parts to a customer's governance was a major reason for the sales decline.
-New production plants which met or exceeded planned production volumes in China in 2007 include ZF Fawer Chassis Technology Co. Ltd. (Chanchun) with the assembly of front and rear axle systems for Audi and ZF Lemforder Automotive systems Co. Ltd. (Shenyang) with axle assembly for BMW.
-At ZF Lemforder Australia Pyt. Ltd., the assembly of axle systems for GM Holden was raised with the scheduled increase of more than 600 axle sets per a day. Control arm production for GM Holden in Australia reached the volume production level.
-The axle assembly plant in Great Britain supplied the one millionth sets of corner modules to Land Lover.
-ZF Lemforder Chicago LLC lagged considerably behind planning after a customer reduced order volumes.
-ZF Lemfoerder Chassis Technology Korea Co. Ltd. (Gumi-City) exceeded the planned production volumes.
-ZF Lemforder Corporation for chassis components (Newton, North Carolina) attained the planned volume.
-ZF do Brasil Ltda.(Sorocaba-SP) increased sales for chassis components.
-The Gearshift Systems business unit attained a sales growth of 14% to euro 190 million in 2007.
4)
-With growth of 17.4%, sales in the Commercial Vehicle and Special Driveline Technology division recorded sales of euro 2,085 million.
-Truck Driveline business unit increased sales by 25% to euro 1,543 million
Further penetration of the Western European market with the automatic AS Tronic transmission range in the heavy segment as well as the steep ramp-up curve of the AS Tronic mid and AS Tronic lite model ranges introduced in 2006 led to this above-average growth.
-Manual transmissions in the heavy and mid-size class benefited from the strong demand in Eastern Europe and Asia.
-The locations in Russia and China registered strong growth.
-In South Korea, the new manual 6-speed transmission generation of the Ecolite type was successful.
-In 2007, the Bus Driveline Technology business unit increased sales by 18% to euro 391 million. The major growth driver was the automatic Ecomat transmission. The major orders were mainly acquired in Asia.
-Despite the continuously difficult market environment in North America, the Pickup/Van Driveline Technology business unit was able to maintain the level in 2006 with total sales of euro 132 million. Business in the European and Japanese markets developed positively.
-The Special Driveline Technology business unit, which includes the military vehicles and special vehicles for civil purposes, rail vehicles, and industrial drives product segments, recorded a sales increase of 25% to euro 177 million.
5)
-All business units in the Off-Road Driveline Technology and Axle Systems division contributed to the sales growth by 10.9% to euro 1,876 million.
-The CV Axle Systems business unit increased sales by 13% to euro 218 million. Transfer cases experienced two-digit sales growth by the selling success in China.
-The continuing boom in the commercial vehicle segment, especially in Western Europe, boosted sales of the Commercial Vehicle Chassis Modules business unit by 14% to euro 30 million.
-After years of development with high growth rate, the Passenger Car Axle Drives business unit entered the consolidation phase. The prior year's sales figures were exceeded by 3% at euro 350 million.
6)
-Sales in the Powertrain and Suspension Components division grew by 12.3% to euro 2,386 million, which was supported by the better market penetration of technologically more demanding products. Both the domestic and foreign business grew likewise.
-In Germany, ZF Sachs benefited from the continuously good economic situation for commercial vehicles and the export success of German vehicle manufacturers. Pleasing sales increases were also with Asian customers, but business development in North America was inconsistent.
-The Powertrain Components business unit recorded an increase in sales of 16% to euro 1,213 million. Demand for dual mass flywheels and wear-adjusting clutches exceeded the level of 2006. Intense development work on hybrid modules for European customers was successfully performed for both the passenger car and the commercial vehicle sector. Moreover, the production launch of new generation torque converters was successful. The outstanding properties in terms of torsional vibration decoupling contribute to fuel savings and CO2 reduction. During 2007, the business unit profited from the good commercial vehicle business. The integrated pneumatic clutch actuation system for heavy commercial vehicles established as a system supplement for clutches and dual mass flywheels.
-The Suspension Components business unit grew by 10% to euro 1,338 million despite continuously difficult framework conditions. Sales increases in all product segments except for the leveling system contributed to the positive figures. In the passenger car sector, sales of the CDC electronic damping system rose considerably. New market segments for sports utility vehicles were opened up. New projects were acquired thanks to technically advanced products such as stabilizer for the ARS hydraulic Active Roll Stabilization system. The amplitude-selective damping was used as a standard feature in mid-size car in 2007.
7)
-Sales in the Rubber-Metal Technology division increased by 1.2% to euro 521 million because of the good development in Europe and continuous growth in South America. On the other hand, sales in North America stayed behind plans as a result of the weak market.
8)
-ZF Lenksysteme GmbH stepped up sales by 11.8% to euro 2,625 million in 2007. 50 % of sales are included in the Consolidated Financial Statements of the Company.
-Sales were divided between the business units as follows:
| - | Car Steering Systems | 58% |
| - | Commercial Vehicle Steering Systems and Columns | 15% |
| - | Car Steering Columns | 14% |
| - | Steering Pumps | 13% |
- The largest sales increase was recorded abroad and the strongest sales driver was the Servolectric electric power steering for passenger cars. In 2007, the five millionth unit was manufactured since production launch in 2002. The share of electric power steering in the Car Steering Systems business unit amounts to 47%. Sales with hydraulic steering systems experienced a slight increase.
Business Overview by Region
-Europe made up 72% of consolidated group sales: 67% in Western Europe and 5% in Eastern Europe. The Company noted sales growth by 8.0% to euro 8,469 million in Western Europe and by 9.9% to euro 601 million in Eastern Europe due to the favorable economic conditions in the commercial vehicles and construction machinery segments as well as the export success of the European customers.
-In Russia, sales of the joint venture OOO ZF Kama in Naberezhnye Chelny increased significantly.
-Sales in North America reached euro 1,279 million for 10% of the consolidated group sales in 2007. The Company faced difficulties of declining sales of traditional US customers who lost market shares to Asian manufacturers.
-Sales in South America increased by 29.5% to euro 478 million due to the positive trend with commercial vehicles and agricultural machinery as well as the business for powertrain and suspension components for passenger cars and light commercial vehicles.
-In the Asia-Pacific region, the Company recorded the largest sales growth by 45.9% to euro 1,627 million, which represents 12.9% of consolidated group sales.
-China experienced a sales surge because of the good economy in all industries and the market success of customer VW. The Company has 19 production companies and the engineering center in Shanghai.
-The plant for passenger car axle systems production in Australia was commissioned for customer GM Holden in 2007.
-In India, the activities in the Commercial Vehicle and Special Driveline Technology and Off-Road Driveline Technology and Axle Systems divisions were continued. The Company is currently setting up a sales office at the Pune location.
Contracts
-In 2007January, the Company announced that it supplies its 6-speed automatic transmission to Maserati's Quattroporte sedan. Along with the 6-speed automatic transmission, the damping system CDC allows for comfortable and safe driving.
-In 2007 January, Iskra Avtoelektrika and ZF Lenksysteme, Germany, signed a five-year agreement for manufacture and supply of electric motor starters for the power-assisted steering wheels that are installed in all Opel models on the Astra platform.
-In March 2007, the Company announced that it supplies specially modified dampers and shock absorbers to Nissan's new Crossover "Qashqai."
-In March 2007, the Company announces that it supplies its 6-speed transmission to the new Maserati Granturismo. The 6-speed automatic transmission can adapt from rapid, sporty gear changes to comfortable shifts, depending on driver preference. The electronic damping system, CDC, contributes both to safety and dynamic performance, because the system adapts the suspension to specific driving conditions.
-In March 2007, the Company announced that it supplies its axle and angle drives, the differential as well as the propshaft to Alfa Romeo for its Alfa Spider models. The driveline components of the Alfa Spider come from the Company's axle drive plants in Gotha and Thyrnau. In addition to the four-wheel drive components from Bavaria and Thuringia, twin-tube dampers at the front and rear axle produced by ZF Sachs lead to optimum road contact. The package is rounded off by a precise, hydraulic power steering gear and a steering pump by ZF Lenksysteme.
-In June 2007, the Company announced that it supplies Torque Vectoring rear axle drive to BMW vehicles. It leads to noticeable added value, both for drivers of all-wheel drive and rear-wheel drive vehicles.
-In October 2007, the Company announced that ZF Sachs, the Company's Powertrain and Suspension Components division, has been supplying dampers for Nissan's global C platform. It all started with the QASHQAI: The cross-over was the first vehicle by the Nissan company with ZF Sachs dampers. Now, four more vehicles, X-TRAIL and the Rogue from Japanese production, the Renault-Samsung QMX, and/or Renault Koleos, which are made in Korea, are added, which are all based on the same global C platform. ZF Sachs supplies suspension struts for the front axle and twin-tube dampers for the rear axle. The dampers for Japan and Korea are supplied by the ZF location in Korea, the ones for the QASHQAI, which is manufactured in England, come from the plants in Spain and Turkey. The scope of supply amounts to a total of 2.4 million dampers per year.
Outlook for FY2008
Overall
-The Company aims at achieving a more balanced sales distribution among the major market regions. Necessary investment to the emerging markets will have high priority in 2008.
-The focus on capacity expansion and production preparations for new products in Europe will be strengthened in 2008.
Car Driveline Technology
-For the coming year, the Car Driveline Technology division expects an increase in sales of 5 %, which is slightly above the industry average.
Car Chassis Technology
-In the year 2008, the Car Chassis Technology division expects major challenges similar to those in 2007. Due to the time lag between the phasing out of axle orders and the later launch of follow-up axle projects, a sales decline of 12% is expected.
Commercial Vehicle and Special Driveline Technology
-The Commercial Vehicle and Special Driveline Technology division expects sales to grow by 10%. Growth drivers are the volume increases for the manual transmissions of the Ecosplit range, automatic transmissions of the AS Tronic range as well as in the segment of mid-size product ranges for the different customers. At the Friedrichshafen and Eger(Hungary) locations, investments of more than euro 200 million are scheduled.
Off-Road Driveline Technology and Axle Systems
-In an overall still positive economic environment, the division is anticipating further growth of 6% in 2008. This forecast is supported in particular by the development of the Asian market and the good positioning with local production in this region.
Powertrain and Suspension Components
-In 2008, the division is expecting 5% growth. Technologically demanding products such as hybrid modules and torque converters for the new generation of automatic 8-speed transmissions and the further rollout of the Global Performance System will make their contributions to the reinforcement of competitiveness and the revenue position. The consolidation and the expansion of capacities in North America are continued on schedule. The plants in Levice, Slovakia will help push market expansion in Eastern Europe.
Rubber-Metal Technology
-In 2008, the Rubber-Metal Technology business unit anticipates sales at the level in 2007. The price pressure from automotive manufacturers and the additional price increase expected for the raw material markets will lead to raising the production share in best cost countries. The business unit will expand its presence in growth markets with Asian manufacturers.
ZF Lenksysteme GmbH
-ZF Lenksysteme expects sales at the same level in 2007.
R&D
R&D Expenditure
R&D Structure
-Approx. 4,600 employees work for Research and Development worldwide. Thereof, 700 engineers and technicians work in Corporate Research and Development for the ZF Group in Friedrichshafen.
-In 2007, an engineering service provider was taken over in Pilsen, Czech Republic. This belongs to the Company's strategy to establish part of the growing development workforce abroad and attract qualified engineers in close proximity for coping with future tasks. The focus of the activities of ZF Engineering Plzen s.r.o will be in the fields of software and mechatronics.
New Product Development
New automatic 8-speed transmission
-In 2007, the new automatic 8-speed transmission generation was presented to the public. It will save approx. 14% fuel compared with the common automatic 5-speed transmission on the market. Early on during development, the Company ensured the optimum integration of hybrid and all-wheel variants, which allows the representation of all know hybrid functionalities in combination with the new automatic 8-speed transmission.
Vector Drive rear axle drive
-In 2007, volume production of the Vector Drive rear axle drive was launched, a product that enhances driving dynamics and agility as well as safety reserves. The drive torque in this networkable module is distributed directly according to the torque vectoring principle and to the driven wheels as needed. The steering torque of the drive axle stabilizes the vehicle especially during cornering and critical driving maneuvers.
Electromechanical active roll stabilizer
-The Company presented an electromechanical active roll stabilizer. This active system minimizes roll during cornering, thereby increasing both driving safety and dynamics. At the same time, the power -on-demand solution requires less energy than hydraulic active roll stabilizers and is easier to install.
AOS (Adaptive Off-road Stabilizer)
-AOS (Adaptive Off-road Stabilizer) is a simple system that allows the drivers of all-terrain vehicles to "decouple" the stabilizer to achieve better traction and propulsion in rugged terrain. A new axis-parallel version of the electric power steering system also allows upper middle class and luxury vehicles to use the fuel economy benefits provided by this power-on-demand technology.
New hydrostatic transmission
-A new hydrostatic transmission was presented for construction machinery up to 9.5t: the transmission system HC85 with two crankshaft radial piston motors allows higher driving speeds up to 42km/h at lower fuel consumption. The operation of dump trucks up to 50t is easier and more fuel efficient, thanks to another new product, the hydrodynamic powershift transmission Ergopower L II with a greater spread of gear noise.
Technological Alliance
-In December 2007, the Company announced in December that GKN Driveline, a driveline system supplier based in the U.K have agreed to jointly develop, manufacture, and market rear-axle torque vectoring systems for rear and all-wheel-drive vehicles. The first production application is planned for BMW and the two companies aim to win business from a wide range of customers leveraging this project.GKN will manufacture and supply torque vectoring hardware units to the Company, which is responsible for final system assembly, the supply of electric motors, and the testing of end-of-line units.
| (in millions of euro) | FY2007 | FY2006 | FY2005 |
| Total | 694 | 602 | 550 |
R&D Structure
-Approx. 4,600 employees work for Research and Development worldwide. Thereof, 700 engineers and technicians work in Corporate Research and Development for the ZF Group in Friedrichshafen.
-In 2007, an engineering service provider was taken over in Pilsen, Czech Republic. This belongs to the Company's strategy to establish part of the growing development workforce abroad and attract qualified engineers in close proximity for coping with future tasks. The focus of the activities of ZF Engineering Plzen s.r.o will be in the fields of software and mechatronics.
New Product Development
New automatic 8-speed transmission
-In 2007, the new automatic 8-speed transmission generation was presented to the public. It will save approx. 14% fuel compared with the common automatic 5-speed transmission on the market. Early on during development, the Company ensured the optimum integration of hybrid and all-wheel variants, which allows the representation of all know hybrid functionalities in combination with the new automatic 8-speed transmission.
Vector Drive rear axle drive
-In 2007, volume production of the Vector Drive rear axle drive was launched, a product that enhances driving dynamics and agility as well as safety reserves. The drive torque in this networkable module is distributed directly according to the torque vectoring principle and to the driven wheels as needed. The steering torque of the drive axle stabilizes the vehicle especially during cornering and critical driving maneuvers.
Electromechanical active roll stabilizer
-The Company presented an electromechanical active roll stabilizer. This active system minimizes roll during cornering, thereby increasing both driving safety and dynamics. At the same time, the power -on-demand solution requires less energy than hydraulic active roll stabilizers and is easier to install.
AOS (Adaptive Off-road Stabilizer)
-AOS (Adaptive Off-road Stabilizer) is a simple system that allows the drivers of all-terrain vehicles to "decouple" the stabilizer to achieve better traction and propulsion in rugged terrain. A new axis-parallel version of the electric power steering system also allows upper middle class and luxury vehicles to use the fuel economy benefits provided by this power-on-demand technology.
New hydrostatic transmission
-A new hydrostatic transmission was presented for construction machinery up to 9.5t: the transmission system HC85 with two crankshaft radial piston motors allows higher driving speeds up to 42km/h at lower fuel consumption. The operation of dump trucks up to 50t is easier and more fuel efficient, thanks to another new product, the hydrodynamic powershift transmission Ergopower L II with a greater spread of gear noise.
Technological Alliance
-In December 2007, the Company announced in December that GKN Driveline, a driveline system supplier based in the U.K have agreed to jointly develop, manufacture, and market rear-axle torque vectoring systems for rear and all-wheel-drive vehicles. The first production application is planned for BMW and the two companies aim to win business from a wide range of customers leveraging this project.GKN will manufacture and supply torque vectoring hardware units to the Company, which is responsible for final system assembly, the supply of electric motors, and the testing of end-of-line units.
Investment Activities
Investments
Overall
-The investments in property, plant and equipment at the Consolidated Group increased by around a quarter compared with the prior year, totaling euro 584 million.
-In May 2007, the Company announced that the expansion of the joint ZF and Kamaz plant in Naberezhnye Chelny, Tartastan (Russian Federation) was planned for completion by 2010. The production for Kamaz that the Company plans to produce 54,000 vehicles in 2007 includes transmissions for heavy- and medium-duty commercial vehicles. Kamaz has announced plans to completely change over all vehicle models to ZF transmissions. ZF Kama launched production operations in January 2006.
-As of July 1, 2007, the Company has taken over Value Engineering Serves, a Czech company, which, as ZF Engineering Pilsen, becomes an important element of the global development strategy of the ZF Group.
Car Driveline Technology
-This division increased its capacity for the automatic 6-speed transmission and the preparation for volume production of the new automatic 8-speed transmissions. The production launch of the dual clutch transmission was pushed ahead in Brandenburg.
Car Chassis Technology
-This division registered lower investments compared to the prior year. Investments in 2007 were mainly made in Shanghai(China), German companies and Sorocaba-SP(Brazil).
-In March 2007, the Company announced that the Car Chassis Technology Division - ZF Lemfoerder - opened a new plant in Adelaide to supply Australian vehicle manufacturer GM Holden. The Company invested $24 million in the project. The plant supplies front and rear axle systems to the GM Holden for the new Holden VE model. The Company currently has 150 employees working at the new plant. Annual sales for 2007 are expected to reach approx. $252 million. The new plant is the tenth division that specializes in complete axle systems for the automotive industry.
Commercial Vehicle and Special Driveline Technology
-The consistently order situation and a continuous increase in demand required the major share of investments in Friedrichshafen(Germany), Eger(Hungary), and Boutheon(France).
Off-Road Driveline Technology and Axle Systems
-The major investments were made at the companies in Germany, Gainesville, Georgia(USA), Steyr(Austria) and Sorocaba-SP(Brazil).
Powertrain and Suspension Components
-The division received the largest investment share of the Consolidated Group in 2007. Mainly the locations in Schweinfurt(Germany), Trnava(Slovakia), Saltillo and Guadalajara(Mexico), and Shanghai(China) are expanded.
| (in millions of euro) | FY2007 | FY2006 | FY2005 |
|
Investments in tangible assets |
584 |
469 | 525 |
Overall
-The investments in property, plant and equipment at the Consolidated Group increased by around a quarter compared with the prior year, totaling euro 584 million.
-In May 2007, the Company announced that the expansion of the joint ZF and Kamaz plant in Naberezhnye Chelny, Tartastan (Russian Federation) was planned for completion by 2010. The production for Kamaz that the Company plans to produce 54,000 vehicles in 2007 includes transmissions for heavy- and medium-duty commercial vehicles. Kamaz has announced plans to completely change over all vehicle models to ZF transmissions. ZF Kama launched production operations in January 2006.
-As of July 1, 2007, the Company has taken over Value Engineering Serves, a Czech company, which, as ZF Engineering Pilsen, becomes an important element of the global development strategy of the ZF Group.
Car Driveline Technology
-This division increased its capacity for the automatic 6-speed transmission and the preparation for volume production of the new automatic 8-speed transmissions. The production launch of the dual clutch transmission was pushed ahead in Brandenburg.
Car Chassis Technology
-This division registered lower investments compared to the prior year. Investments in 2007 were mainly made in Shanghai(China), German companies and Sorocaba-SP(Brazil).
-In March 2007, the Company announced that the Car Chassis Technology Division - ZF Lemfoerder - opened a new plant in Adelaide to supply Australian vehicle manufacturer GM Holden. The Company invested $24 million in the project. The plant supplies front and rear axle systems to the GM Holden for the new Holden VE model. The Company currently has 150 employees working at the new plant. Annual sales for 2007 are expected to reach approx. $252 million. The new plant is the tenth division that specializes in complete axle systems for the automotive industry.
Commercial Vehicle and Special Driveline Technology
-The consistently order situation and a continuous increase in demand required the major share of investments in Friedrichshafen(Germany), Eger(Hungary), and Boutheon(France).
Off-Road Driveline Technology and Axle Systems
-The major investments were made at the companies in Germany, Gainesville, Georgia(USA), Steyr(Austria) and Sorocaba-SP(Brazil).
Powertrain and Suspension Components
-The division received the largest investment share of the Consolidated Group in 2007. Mainly the locations in Schweinfurt(Germany), Trnava(Slovakia), Saltillo and Guadalajara(Mexico), and Shanghai(China) are expanded.