ZF Friedrichshafen AG, leading automotive supplier of driveline and chassis technology, has put up a strong showing in 2012 despite challenging market conditions in the commercial vehicle segment globally. The German tier-1 supplier expanded its product portfolio during the year with some interesting new launches and performed quite well across different segments in key markets. We take a closer look at how the company performed in 2012.
With the market downturn in the commercial vehicle industry persisting, ZF’s CV division was faced with a difficult environment, predominately in the European and South American markets, as also in China. Sales totalled EUR 3,043 million and, at the end of 2012, the number of employees got slightly reduced to 13,833.
After two years of strong sales, the Truck & Van Driveline Technology business unit reported a drop in sales. The declining developments in economic activities in Western Europe, especially in Southern Europe, had been expected. In South America, the market slump was more drastic than expected. This had its significant negative impact on sales and results.
The new TraXon modular transmission system was successfully presented at IAA Commercial Vehicles. A letter of intent to introduce TraXon was signed with Iveco, and negotiations are on with other vehicle manufacturers. The product launches at the Sorocaba (Brazil), Eger (Hungary) and Hangzhou (China) locations were managed successfully and strengthen the internationalization path embarked upon. Development of the ZF Kama joint venture in Russia is proceeding well. The most important quantity and sales targets were achieved. For 2013, additional localization activities are planned for the new markets.
Market conditions lead to drop in sales
In the Bus Driveline Technology business unit, the Ecomat automatic transmission generation has been largely replaced by EcoLife. The 6-speed philosophy for automatic transmissions as “standard” in city buses has thus continued unabated. Significant market successes were recorded in Turkey, and with special orders from Russia.
In Asia, market developments were stable and even exceeded planning in some cases. One highlight is the major order for manual transmissions for Korean coaches. In China, important steps were taken to tap the new market for the HyTronic hybrid transmission. New orders were received in the declining South American bus market.
In this context, an important encouraging factor was the manual transmission localized for school buses in Sorocaba (Brazil). Market recovery is projected for this region in 2013. Furthermore, the business unit expects additional positive momentum from Europe and Asia.
International success continues
The CV Axle Systems business unit increased its sales once again, and thus the sales figures were significantly higher than projected. The positive development of the markets in China and Russia more than compensated for the weak business in Europe and ensured a successful year. At the end of 2012, the stronger upward market trend outside Europe confirmed the positive prospects for 2013.
Sales of driven truck front axles matched expectations. At IAA, the new IS 80 TF independent suspension system which is primarily designed for truck applications was received with gusto. The RL 85 EC independent suspension developed for the Chinese market was industrialized in the first half of the year. A major short-term order from the Beijing transport authorities has already ensured the target volume production numbers beyond 2013. The State-aided activities for electromobility in Asia allowed the business unit to participate in the first prototype and preproduction vehicles with the AVE 130 electric portal axle.
Product portfolio expansion
The CV Chassis Modules business unit was able to maintain sales despite the difficult economic environment. The cabin suspensions product segment acquired from ThyssenKrupp Automotive Systems was relocated from Werdohl (Germany) to Dielingen (Germany). This allowed the business unit to become the market leader in Europe for this product line as well.
The rear axle suspension system acquired from a major European customer in 2011 was further developed to reach the maturity phase. Volume production will start soon. New manufacturing technologies and innovative lightweight design concepts are taken into consideration here.
The Dielingen (Germany) location was expanded to accommodate the afore-mentioned projects. To systematically advance internationalization, commercial vehicle manufacturers in India were won as customers, and preparations are on for volume production in Pune as of 2013. With regard to the lightweight construction megatrend, a tandem-axle unit with a leading axle and a study on the 4-point link made of fiber-reinforced plastics were presented at IAA Commercial Vehicles.
Strong presence despite odds
Sales of the CV Damper Technology business unit followed the expected market developments, which were especially negative in South America. The Chinese market showed only weak signs of recovery. Additional growth was realized in North America. Europe developed as expected. The business unit was able to win additional market shares in the worldwide commercial vehicle and rail vehicle markets, in particular with new vehicle generations.
Additional customers were won over for the CALM air-spring damper module with integrated leveling system for the driver’s cabin. Business developments in the conventional rail vehicle markets varied. China was subject to the general situation of the commercial vehicle market; in India, and especially in Russia, supplementary orders and new acquisitions were reported. Customers for the new crash systems product for rail vehicles were acquired sooner than expected.
Product launches
The CV Powertrain Modules business unit reported the same level of sales as in the prior year. Integration and modernization of the South African subsidiary in Johannesburg were completed. The locations in China reported a welcome increase in sales. Brazil did not achieve the sales figures of the previous year. Extensive modernization began at the plant in Bielefeld (Germany). The business unit pressed ahead with the construction of a much-needed production plant in Gainesville (USA). Development activities focused on the start of volume production of a dual-clutch module for new vehicle generations.
Furthermore, new clutch models are being developed for the coming Euro 6 legislation, as also products that help reduce fuel consumption. An example of this is the air compressor clutch (ACC), a wet-running multi-disc clutch that is pneumatically actuated and can decouple the compressor from the engine. The quality standard of the product also contributed to increased market shares.
For 2013, the division plans to achieve sales growth of roughly six per cent. However, it will be challenging to actually realize this growth due to the dull market environment in Western Europe looming at the end of 2012. However, the signals from the markets of China and South America for 2013 are positive compared to 2012.
An important factor for additional market penetration in China is the foundation of a joint venture with a Chinese manufacturer for heavy commercial vehicles. In general, increased volatility is expected in the commercial vehicle industry, necessitating greater flexibility in prduction and capacity management.