ZF Group looks to China to play greater role in transformation
Absolutely, we want to grow. Overall, the Asia-Pacific region should be one-third of our business, and it is mainly from China. So we’re going in the direction of 30 percent, that is something we’re aiming at.”
German auto supplier ZF Group expects China to play a bigger role in its transformation into a technology company that among other things offers e-mobility, autonomous driving and software solutions, its top executive said.
Last year, ZF saw its revenue fall to 32.6 billion euros ($38.6 billion) because of the sweeping COVID-19 pandemic.
China, thanks to its successful curbing of the disease, was the only growth market for the company. It generated revenue of 6.4 billion euros in the country, up 10 percent from 2019 and accounting for roughly one-fifth of ZF’s global total.
CEO Wolf-Henning Scheider said he was impressed by China’s quick action to contain the coronavirus and its team’s success in resuming operations in the country, which provided an example for ZF operations in other parts of the world.
As the situation further improves, Scheider expects even greater business performance in China.
“Absolutely, we want to grow. Overall, the Asia-Pacific region should be one-third of our business, and it is mainly from China. So we’re going in the direction of 30 percent, that is something we’re aiming at,” he told China Daily in an exclusive interview.
Considering the global economy’s expected further recovery and the current estimates for the individual divisions, ZF expects to generate sales of between 37 - 39 billion euros in 2021.
Scheider said while the existing technologies will contribute most, its business in new areas is gaining traction.
By the end of 2020, ZF had won orders for electric driveline components with a sales volume of 14 billion euros over the next several years.
The positive trend has continued into the first few months of this year with additional orders.
Earlier this year, ZF established a new electrified powertrain technology division that bundles conventional, hybrid and pure electric
Wolf-Henning Scheider, CEO of ZF Group
drive technologies for passenger cars.
This has enabled the company to offer its customers the entire range for e-mobility from one department.
It will combine commercial vehicle technology company Wabco with the existing commercial vehicle technology division by the end of this year to leverage synergies.
“Wabco turns out to be more of a perfect match every day. We have developed initial joint projects and turned them into customer orders,” Scheider said.
“And we can already see benefits from the cooperation in terms of products and new orders as well as financially.”
ZF hardware and autonomous driving solutions are gaining wider industry recognition, and for the first time, ZF will offer software products that customers can purchase independently of its hardware.
In China, two local carmakers have launched products that feature ZF cameras and advanced driving-assist solutions.
“We are thrilled to launch products with Chinese customers,” said Scheider, adding that such new products will be a strong contributor to its future business performance.
He said Chinese customers are eager, ambitious and open to adopting new technologies as soon as possible.
“One of the elements why we are very positive about the collaboration with Chinese customers is that this often fits to alter our thinking and our behavior. And I’m really counting on this for future success,” Scheider said.
The company is expanding its production and research and development facilities in the country to introduce the latest technologies and know-how. Among them are an engineering center in Guangdong province and an e-mobility plant in Shenyang, Liaoning province. ZF is also expanding the regional headquarters in Shanghai, according to the company.
“We are making China a ‘home room’ for many of our product lines and empowering our Chinese R&D teams to shape global automotive innovations from China. This is also our answer to a more resilient supply chain, and to China’s call for industrial upgrade,” Scheider said.
He said ZF fully supports open innovation platforms in China’s ecosystems, sharing knowledge and resources, constantly adapting its global standards to meet local market needs, creating business values and fulfilling social responsibilities in the country.
“Our ambition is not only to share these with our customers and suppliers, but also with tech companies, startups, academies and associations in China,” he said.
ZF has revealed its target to become carbon-neutral by 2040, which is 10 years earlier than planned according to the Paris Agreement, contributing to China’s decarbonization goal.
“We are actively supporting China in achieving its commitment of carbon neutrality by 2060 by pursuing zero emissions — both across our technology portfolio such as e-drive solutions, and also across the entire value chain including renewable energy from our wind power activities,” Scheider said.