ZF Group (China) FY2010

Business Highlights

- 86% of the Company's revenue is generated by sales of products for passenger vehicles and commercial vehicles. (as of January 2011).

- The Group conducts its business in five operating segments:

1. Driveline Systems: Manual transmissions, Automatic transmissions, Driveline systems for buses & coaches
2. Powertrain Systems and Suspension Systems: Clutches, Flywheels, Torque converters, Shock absorbers
3. Chassis Systems:

Chassis modules, Suspension modules, Axle modules, Chassis components

4. Rubber Metals: Vibration-control rubber-metal parts 
5. Steering Systems (ZF Lenksysteme: a 50-50 joint venture between ZF and Bosch) Power steering systems, Steering pumps, EPSs, Steering gears, Rack & pinion steering systems

Business Overview

-In 2010, the total sales in China are 1.324 billion euros, which are up by 44% on the previous year. In terms of product range, the sales in chassis technology products account for 78%, up by 44% year on year; the driveline technology products, 20%, up by 26%; and other products, 2%. When broken down according to vehicle type, commercial vehicles more than 6 tons represent 19%; passenger cars and vehicles less than 6 tons are 73% and construction vehicles and special vehicles, represent 8%.(From catalogues issued in Shanghai Auto show 2011.) 

-In November 2010, the Company announced that it will establish a separate China Division, in Shanghai. Currently, its Chinese operations are part of its Asia Pacific Division. The new China Division will directly report to ZF headquarters as an independent region. ZF has more than 120 production facilities and 6 R&D centers worldwide, with more than 20 plants in China and an R&D center in Shanghai. ZF decided to make China a stand-alone region because approximately 20 percent of ZF's total sales is generated in China, with even further growth expected. Managerial positions at the new China Division likely will be filled by people currently working at the Asia Pacific Division. (From news releases issued by multiple sources on November 1, 2010)

Highlights by segment

<Driveline Systems>
-The Company supplies transmissions to Chinese commercial vehicle manufacturer Beiqi Foton Motor. The Aumark light truck will be equipped standard with the 5S 400 manual transmission, which will be manufactured at the ZF location in Hangzhou, Zhejiang Province, starting April, 2010. ZF Lenksysteme GmbH supplies the vane pumps and CV steering systems, Servocom 8098 type, for the Auman brand by Foton. (From a press release on May 12, 2010)

-The Company and Beiqi Foton Motor will extend their strategic cooperation in China. As a further project, ZF's Ecolite 6-speed transmission will be produced in China for a new generation of light commercial vehicles by Foton. Since September 2008, the two companies have been cooperating in joint development work for the Chinese market. ZF's 5 S 400 manual transmission has already been adapted as standard equipment on the Foton truck, Aumark brand. (From a press release on September 22, 2010)

-The Company and Dongfeng Commercial Vehicle Company (DFCV) of China signed an agreement which secures future cooperation. ZF will deliver automated manual transmissions "AS Tronic" and intarders to DFCV. The two companies have been teamed up since 2006. As a result, ZF is supplying DFCV with manual transmissions out of local production in China. (From a press release on September 24, 2010)

-A manual transmission series designed for the Chinese market went into volume production in China. Due to positive environmental effects achieved with Ecolife, shares in the city bus rose. Major orders from the Expo in Shanghai contributed greatly to the gains of the Group.(From the Company's 2010 annual report )

ZF Transmission Shanghai Co., Ltd. improved performance of ATs
-ZF Transmission Shanghai Co., Ltd., a subsidiary of the group, produced 100,000 5-speed and 6-speed automatic transmissions in 2010, achieving an increase of 8% compared to 2009..(From the company's 2010 annual report)

Joint venture
-On August 6, the ZF Group (China) and Chongqing Machinery & Electronics Holding (Group) Co., Ltd. (CQME) signed an agreement to establish a joint-venture company that will manufacture commercial-vehicle transmissions. On the CQME side, the actual company involved in the joint venture will be Qijiang Gear Transmission Co., Ltd., a major transmission manufacturer in the CQME group. The two companies finally reached an agreement after years of negotiations over the project. 

<Steering Systems (ZF Lenksysteme) > 
Steering systems for CNHTC

-On December 17, 2010, ZF Commercial Vehicle Steering (Shandong) Co., Ltd.), a subsidiary of the ZF Group (China), signed a strategic agreement, under which ZF will develop and supply steering systems for the new vehicle series produced by the China National Heavy Duty Truck Group. (From news releases issued by multiple sources on December 24, 2010)

<Powertrain and Suspension Components (ZF Sachs)>
Joint venture
-At the Hannover Auto Show, the ZF Group and Baotou Beiben Heavy-Duty Truck Co., Ltd. (Beiben) signed a letter of intent to establish a joint venture company to manufacture rear suspension systems for heavy-duty trucks in Baotou, Inner Mongolia. Based on the agreement, Beiben will launch a next-generation, heavy-duty truck in China within the next two years and ZF's Chinese operations will start producing rear suspension systems in the country. Beiben will produce a heavy-duty truck that meets European standards and features either ZF's spring-steel-sheet or air-spring rear suspension systems. Moreover, the two companies are talking about possible areas of future commercial partnerships such as technology on cabin suspensions and chassis. (From new releases issued by multiple sources in October 13, 2010)


R&D structure

-The ZF Group's new Asian headquarters and R&D center built in Shanghai officially started operations on June 8. The new headquarters office is 6,000 square meters, and the R&D center is 4,000 square meters in size.The company has invested approximately 20 million euros in the complex. When the planned second phase of construction is completed in the future, the floor space will be increased by an additional 20,000 square meters. The R&D facility now employs 100 people, but the company is planning to increase the number to 300 by 2013. (From a press release on June 10, 2010)