ZF Friedrichshafen AG Business Report FY ended Dec. 2012

Business Highlights

Financial Overview

(in million euros)
  FY ended Dec. 31, 2012 FY ended Dec. 31, 2011 Rate of change (%) Factors
Sales 17,366 15,509 12.0 -
EBITDA 1,667 1,574 5.9 -

Business Overview

<Sales by major divisions>
Powertrain Technology

-In FY2012, sales in the Powertrain Technology division increased by 24 percent to 4,902 million euros, primarily due to the high demand for transmissions and driveline components in the premium passener car segment.
Chassis Technology
-In FY2012, the Chassis Technology division reported growth of 17 percent to 4,969 million euros. The sales increase primarily resulted from the high demand for passenger car axle systems.

Commercial Vehicle Technology
-In FY2012, the weak development in the commercial vehicle market resulted in a 7 percent drop in sales in the Commercial Vehicle Technology division to 3,043 million euros.

Steering Systems; ZF Lenksysteme GmbH
-In FY2012, ZF Lenksysteme GmbH, a joint venture with Robert Bosch GmbH, continued to develop successfully and showed a sales increase of 11 percent to 3,976 million euros, of which 50 percent has been included in the consolidated financial statements. The Servolectric electric power steering system, with its different variants for various passenger car segments, was able to increase its market shares worldwide.

<Sales by region>
-In FY2012, sales in Europe grew by 5.1 percent to 9,942 million euros. The sales share of the region in Group sales dropped from 61 percent to 57 percent.

North America/South America
-In FY2012, sales in North America surged by 40.9 percent to 3,267 million euros. The region's share in Group sales increased from 15 percent to 19 percent. The passenger car business in driveline and chassis technology contributed substantially to this growth.

-In FY2012, sales in South America dropped by 13.6 percent to 760 million euros. The commercial vehicle business was especially affected. The introduction of new emission standards in 2012 caused a preemptive effect in the market, which had resulted in a positive influence in 2011.

-In FY2012, sales of 3,183 million euros were achieved in the Asia-Pacific region, an increase of 21 percent. China, as the largest market, was able to achieve production growth in passenger cars and light commercial vehicles once again. In particular, sales of premium German vehicles increased substantially in the emerging Chinese market.


-In 2012, the Company announced that it has received a letter of intent from Iveco for TraXon, its new transmission system: As from October 2014, ZF will supply the new automatic transmission system to Iveco. It will then replace the currently installed ZF-AS Tronic in heavy trucks of Iveco's Stralis and Trakker models. (From a press release on September 19, 2012)

-In 2012, the Company said that its twin-tube dampers have been chosen for installation on the new Nissan Altima. These dampers uses ZF's advanced preloaded valve for the first time. This new valve technology ensures that noise characteristics remain excellent despite the handling-focused characteristic curve of the dampers. It enables high noise comfort at the maximum performances for the totally redesigned chassis of the Altima. (From an article in the Nikkan Jidosha Shimbun on May 26, 2012)

-In 2012, the Company delivers the 7-speed manual transmission (7MT) for Porsche's new 911 Carrera and 911 Carrera S models. It was created based on the 7-speed dual clutch transmission (7DT). This is the first manual transmission with 7 gears that is available for passenger cars. The new 911 reaches its top speed already in the sixth gear. The seventh gear, however, has a high gearing and helps to save fuel. (From a press release on May 9, 2012)

-In 2012, the Company announced that it supplies ZF Driveline and Chassis Technology for eleven manufacturers, which have bus production locations in Turkey: Mercedes-Benz, MAN, Temsa, BMC, Otokar, Guleryuz, Karsan, TCV, Tezauto, Isoto and Isuzu. For 2012, orders have already been placed for 900 buses with ZF technology from the three major transport operators of Turkey, namely IETT, EGO, and Eshot. IETT, based in Istanbul, has ordered 221 low-floor articulated buses of the "Conecto" type with Mercedes-Benz Turk, which are equipped with the AV 132 driven axle, the AVN 132 tag axle, ZF-Servocom steering, EcoLife automatic transmission, TopoDyn Life transmission control unit. In addition, 279 "Procity" low-floor solo buses by the manufacturer BMC are included in the IETT major order - all with EcoLife, front and rear axle, as well as steering column by the ZF Group. Another 150 buses of the "Procity" type were ordered by Eshot, based in Izmir. EGO in Ankara has ordered 250 MAN buses of the "Lion's City" model, which are equipped with the EcoLife transmission and ZF low-floor axles. (From a press release on April 19, 2012)

-In 2012, the Company announced that its 8-speed automatic transmission (8HP) will be available in the 5.7-liter HEMI V-8 and standard with the Pentastar 3.6-liter V-6 for the 2013 Ram 1500 pick-up truck. The new so called TorqueFlite 8 significantly reduces fuel consumption when compared to Chrysler's current 6-speed transmission. The 8-speed automatic transmission is designed to work in conjunction with the Ram 1500's stop-start technology. This function is enabled by the development of the hydraulic impulse oil storage (HIS). It supplies the hydraulic oil that the transmission's shift elements need for starting. When the engine is switched off, it allows for a quick engagement. With the stop-start function of the hydraulic impulse oil storage, it is possible to reduce fuel consumption by 3.3 percent. ZF and Chrysler have a commercial agreement to produce lightweight axles, which also are featured on the 2013 Ram 1500. (From a press release on April 17, 2012)

Purchase Policy

-In 2012, the Company announced that it is aiming at 500 million euros savings in Purchasing in the next two years. To achieve this, the number of suppliers is cut down significantly. Lower prices for production materials are just one lever ZF wants to use. Standardized supplier is another one. To this end, the previously decentralized negotiation of purchasing conditions will be standardized throughout ZF. It is also becoming increasingly important that the suppliers are capable of delivering worldwide, i.e. production materials can be supplied in the same quality not only within Europe but also in Asia or North and South America. (From a press release on September 13, 2012)


-In 2012, the Company announced that it has signed a purchasing contract with ThyssenKrupp Automotive Systems GmbH (TKAS) about its cabin suspension business unit in Werdohl location, North Rhine-Westphalia, Germany. TKAS generates a sales figure of about 15 million euros at its Werdohl location with currently 41 permanent employees. The economic transition of this business area is planned for the first quarter of 2012. The TKAS cabin suspension business area adds to the product portfolio of ZF's Commercial Vehicle Technology Division and will be integrated in the existing CV Chassis Modules Business Unit. To this end, the newly acquired product segment will be transferred to ZF's Dielingen location (Northern North Rhine-Westphalia) until the end of 2012. The business unit's production locations are in Dielingen, Ermua (Spain), Izmir (Turkey), Gainesville (Florida, USA), Sorocaba (Brazil), and Shanghai (China). (From a press release on January 26, 2012)

Business Partnership

-On August 22, 2012, the ZF Group and the Shandong Haoxin Group signed an agreement to form a business alliance. Based on the agreement, Shandong Haoxin will establish an additional production line to manufacture cast parts for 200,000 vehicles a year, which will be supplied exclusively to ZF. Operations are scheduled to begin in January next year with a plan to increase the annual production volume to parts for 400,000 vehicles within the next two years. Shandong Haoxin has been supplying its products to ZF since 2010. It also has partnerships with Weichai Power and Foton-Cummins. (From news releases issued by multiple sources on August 23, 2012)

-In 2012, ZF Shanghai Steering Systems Co., Ltd., a joint venture between ZF and HUAYU Automotive Systems Company Limited, has started to mass-produce its column-type electric power steering systems for Shanghai Automobile’s proprietary electric vehicles. The development project for the power steering systems was led by Shanghai Automobile, which received technical support from ZF. The production launch has become another major breakthrough in the company’s EPS business, following its achievement in producing EPSdp in China in 2010. (From a press release, August 10, 2012)

Recent Development Outside Germany

-In 2012, the Company has started studies on manufacturing 9-speed ATs for transverse-mounted engine vehicles in China in addition to the U.S., where production of the same AT is scheduled to commence in 2013. ZF developed two models of 9-speed AT, 9HP48 for over 3-liter engine vehicles and 9HP24 for small displacement turbo-charged cars and 2-liter naturally aspirated cars. They are approx. 16% more fuel-efficient than existing 6-speed ATs. The new South Carolina plant has an annual production capacity of 400,000 units of the 9HP48 and has already received orders for the full capacity. Considering growing number of 9-speed AT vehicles, the company will expand production capacities, especially in Asia including China. Currently, it is looking into possible sites, production volume and start-up timing for the new plant in China. It plans to manufacture the 9HP24, which is applicable to the FWD and FWD-based 4WD, largely produced in China. ZF may partially change the engineering design in order to procure parts locally through the local parts supply network, aiming for less production cost to achieve higher competitiveness. (From an article in the Nikkan Jidosha Shimbun on Jun. 28, 2012) 

-In 2012, the Company announced that it will invest up to 1.5 billion euros in new plants and new products worldwide in 2012; by the end of 2015, this figure will amount to approximately 5 billion euros. (From a press release on April 27, 2012) 


-In 2012, the Company announced that it has received "Volkswagen Group Award 2012". The company was honored for supplying gearshift systems. These are also installed in Volkswagen models based on the new Modular Transverse Matrix (MQB) platform. (From a press release on July 26, 2012)

-In 2012, the Company that its Powertrain Technology Division received the Gold Award of "World Excellence Awards" from Ford. The award recognizes ZF's 6-speed automatic transmission, which Ford uses for the Australian models Falcon and Territory. ZF also produces complete axle systems, as well as driveline components, for example, clutch systems or torsion dampers for several Ford models. (From a press release on June 12, 2012)

-In 2012, the Company announced that it won Chrysler's "Innovation Supplier of the Year Award" for the 8-speed automatic transmission (8HP). The 8HP is currently in volume production application in the Chrysler 300 and the Dodge Charger - as of fall, it will also be installed in the new model generation of the Ram 1500. (From a press release on June 12, 2012)

-In 2012, the Company announced that ZF Commercial Vehicle Technology Division in South America won the "Fiat Qualitas 2012" award in the "Metallic Components" category for its light, medium and heavy truck transmissions. Also the dampers from Argentina won an award. In 2011, the ZF location of Sorocaba, Brazil delivered more than 10,000 manual transmissions from the Ecosplit, Ecomid, and Ecolite model ranges to Iveco in South America. In South America, ZF has four locations in Brazil and one in Argentina. In 2011, the Group achieved a total sales volume of 880 million euros in the region, out of which 546 million amounted to the commercial vehicle business. (From a press release on May 18, 2012)


R&D Expenditure

(in million euros)
  FY ended Dec. 31, 2012 FY ended Dec. 31, 2011 FY ended Dec. 31, 2010
Total 861 754 646

R&D Structure

-Approximately 7,120 employees work for ZF Research and Development worldwide. Of these, about 970 engineers and technicians work at the ZF Group's Corporate Research and Development departments in Friedrichshafen (Germany), and an additional 330 in Pilsen (Czech Republic), Shanghai (China), and Tokyo (Japan).

-In 2012, the Company will step up its development operations in Japan. ZF Japan's R&D center, which now employs 10 local engineers, will double the number to 20, while working more closely with the group's development facility in Shanghai so that it can promptly make design changes and technical improvements based on its customers' requirements. ZF aims to shorten development lead-time by ensuring high technical capabilities in Japan, as business with Japanese automakers is increasing. The company's Japanese customers include passenger vehicle manufacturers such as Toyota, Nissan and Honda, as well as four commercial vehicle manufacturers. It is supplying its products to them on a global basis. ZF is expecting to win growing demand for its various technologies that contribute to reducing vehicle weight and enhancing fuel economy. (From an article in the Nikkan Jidosha Shimbun on Oct. 10, 2012)

R&D Facilities

<Major R&D Facilities>
Location Main theme
Friedrichshafen, Germany -Corporate research
-Advanced development
Dielingen, Germany -Chassis system
-Chassis component
Schweinfurt, Germany -Powertrain module
Passau, Germany -Differential
-Test system
Schwaebisch-Gmuend, Germany -Steering for passenger cars and commercial vehicles
Northville, USA -Transmission
-Chassis clutch
Shanghai, China -


-In 2012, the Company announced that it applied for 669 patents in Germany in 2011. At the same time, the Group invested a total of 754 million euros in research and development worldwide. (From a press release on June 21, 2012)

Product Development

Electronically controlled rear axle steering system
-In 2012, the Company is going to mass-produce electronically controlled rear axle steering system, starting in 2013. Compared with conventional technology, the electrified steering system is substantially smaller and lighter. This allows for its vehicle applications without requiring any major design changes to the rear axle. The advanced steering system offers improved chassis performance and enhanced driving safety by optimally controlling both wheels on the rear axle according to the steering angle and the traveling speed. The technology is expected to gain greater use in a various vehicle models. By underlining the high levels of agility and tracking stability achieved by the system, the company will make proposals to its customers to win new programs. (From an article in the Nikkan Jidosha Shimbun on Nov. 21, 2012)

AT for heavy trucks
-In 2012, the Company developed the new TraXon automatic transmission system for heavy trucks. The new transmission can transmit torques considerably above 3,000 newton meters. ZF development engineers managed to considerably reduce the noise development of the TraXon compared to the AS Tronic by an average of 6 dB by introducing a new gearing design, innovations for the transmission housing, and by integrating an anti-rattling damper. The new transmission can not only be driven by a dry clutch but also by a hybrid module, dual-clutch module, or a torque converter clutch. With newly developed the PreVision GPS shifting strategy, ZF gives truck manufacturers the opportunity to link up the transmission with GPS data and digital map material. PreVision GPS prevents gearshifts that may be unnecessary within the context of the terrain. (From a press release on August 14, 2012)

Investment Activities

Capital Expenditure

(in million euros)
  FY ended Dec. 31, 2012 FY ended Dec. 31, 2011
Powertrain Technology 538 428
Chassis Technology 188 203
Commercial Vehicle Technology 101 84
Industrial Technology 92 120
ZF Services 11 17
Die Casting Technology 61 38
Steering Systems 168 144
Corporate R&D, Corporate Headquarters, and Service Companies 35 24
Consolidated ZF Group 1,192 1,058

Investment Outside Germany

-In 2012, the Company is expanding its production in China. With the expansion at the Qingpu location in Shanghai, the capacities for the production of rubber-metal and plastic components for the automotive industry are doubled. Since the location's establishment in 2008, rubber-metal components have been developed and manufactured in Qingpu. ZF has doubled the production area to about 23,000 square meters. In addition to the present rubber-metal product portfolio, the plastics production for automotive applications will be included in Qingpu: In 2013, the production of plastics pedal modules and further plastics components will start there. Since 1994, ZF has had its own production locations in China and the number has increased to 22 now. (From a press release on November 26, 2012)

-In 2012, the Company announced that it held a ground-breaking ceremony for its first plant for passenger car axles in Beijing, China. ZF is investing about 15 million euros in the equipment of the new plant, which will have an area of 32,000 square meters. After the production launch, approximately 350 employees will assemble some thousand axle sets per year for the customer Beijing Benz Automotive Co., Ltd. (BBAC), a joint venture of Daimler in China. Apart from current model ranges, the new ZF plant will also supply future car models like the Mercedes-Benz C- and E-Class. At the turn of the year, the first axle set is to be assembled there. (From a press release on February 28, 2012)

-In 2012, the Company announced that it inaugurated its new plant in Rayong, Thailand. The regional subsidiary ZF Lemforder (Thailand) Co. Ltd. will be manufacturing axle systems for passenger cars at the facility. With the relocation to the new plant, which is situated on the Eastern Seaboard Industrial Estate, around 25 kilometers from the existing location, ZF has doubled its production area in Thailand to 7 000 square meters; additional scope for expansion is still available at the site. 135 employees have been manufacturing axle systems for Thailand and the Region of Asia-Pacific at the new facility since April. In addition to BMW, Mercedes-Benz, and GM, which ZF Lemforder Thailand has been supplying for some time, the company has now also managed to secure Ford as a customer. (From a press release on November 15, 2012)

-In 2012, the Company announced that it is going to increase the production capacity at its plant in Tuscaloosa, Alabama, U.S.A. in the second half of 2012. The company has been awarded a contract from Mercedes-Benz U.S. International in Vance, Alabama to supply chassis systems for the new Mercedes-Benz C-Class, which will go into production in 2014. In order to ensure enough capacity to meet the customer’s requirements, ZF is investing 14.60 million dollars (approximately 1.13 billion yen) to expand its exisiting facility. In line with the expansion, the plant will employ additional 85 people. ZF’s Tuscaloosa facility has been delivering front and rear axle systems for Mercedes' M-, R-, and GL-Class vehicles. Products for the new C-Class will be included in its product lineup. (From an article in the Nikkan Jidosha Shimbun on February 22, 2012)