ZF Group (China) Business Report FY ended Dec. 2012

Business Highlights

Subsidiary's Business overview
ZF Shanghai Steering Co., Ltd., a subsidiary of ZF, generated more than 6 billion yuan in sales for 2012 by selling more than 3.3 million steering systems. Compared with the previous year’s result, it was a rise of 60 percent. The subsidiary is now planning a third manufacturing facility to supply its products to automakers such as Shanghai GM, Shanghai GM Wuling, Dongfeng Motor, Changan Ford and FAW-VW (Chengdu). Among other ZF facilities, ZF Shanghai Steering Systems (Yantai) Co., Ltd., produced its 13 millionth hydraulic steering system in December 2012. The Yantai Plant is also stepping up production of electric power steering systems with a dual pinion design. Production and sales of these products reached 1.5 million units in 2012, a dramatic increase from 640,000 units in 2011. In August 2012, the company started for the first time production of column-type electric power steering system (EPSs) for installation on the Roewe E50 electric car built by SAIC. In the area of product development, the company opened a new research center in May 2012, which is larger than any other existing R&D facilities of the group outside its headquarters. The new development center with 230 engineers has already acquired 35 patents, while having filed 12 new applications. (From press releases issued by multiple sources on March 4, 2013)

Production Capacity

ZF Shanghai Steering Systems (Yantai) Co., Ltd. said its 13 millionth steering system has rolled off its production line on December 11, 2012. The ZF subsidiary started constructing a plant in September 2010, completed it and launched production operations in 2011. By 2014 when production reach full capacity, the company is expected to become one of the largest manufacturers of steering systems by producing 4 billion yuan worth of products, while generating 1 billion yuan in pretax profit. (From news releases issued by multiple sources on December 29, 2012)

-ZF Friedrichshafen AG 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)

Additional Production Line

-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)

New Plant

-On Apr 28th, 2012, ZF Transmission Shanghai Co., Ltd. held a groundbreaking ceremony for its new plant. The new plant, located in Jiading Industrial Zone, south to Huiwang Road, East to Zhuwang Road, building area of 19,000 square meters, is expected to be completed in March 2013. This new plant is adjacent to new site of ZF Transmission Shanghai Co., Ltd. and will help to form the regional strategic alliance of integrating manufacture and sales of transmission and related components. ZF Transmission Shanghai was established in Jiading, June 2004 with an annual output of 100,000 units of transmission and sales exceeding 1.6 billion yuanIn the past eight years, the company supplied total 500,000 units transmission. The company mainly supplies 5HP19FL automatic transmission to Passat B5 and B5 GP for Shanghai Volkswagen.(From a press release on April 28, 2012)

-ZF Friedrichshafen AG 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 end of 2012, the first axle set is to be assembled there. (From a press release on February 28, 2012)