Press Release

From Friedrichshafen into the World – Internationalization of the ZF Group

  • Global presence with more than 120 production locations
  • ZF has local production facilities in key markets
  • ZF development network for design-to-market activities
  • ZF Services ensures supply of spare parts and services

Early in the morning of April 13, 1959, nine ZF employees set off in Friedrichshafen for a 14-day sea voyage. Their destination: São Caetano do Sul, south-west of São Paulo. The trip to Brazil to found the first overseas production location was a milestone in ZF corporate history. Just under 60 years ago, the decision to build a plant in Brazil marked the internationalization of the Group and paved the way to what is now the obvious global orientation of the company. Today, ZF Friedrichshafen AG has around 71 400 employees worldwide at over 113 production companies in 26 countries. ZF Friedrichshafen AG generated just under half of its sales outside Western Europe in 2014 – and rising. Wherever automobile manufacturers open plants in the world – ZF is usually already there. The company supplies market-oriented mobility technology worldwide. This international focus is supported by the Group's global service operations.

Show more
From Friedrichshafen into the World – Internationalization of the ZF Group

Long before economists and the media started talking about globalization, ZF laid the foundations for its internationalization. Just under 60 years ago, ZF followed its customer Mercedes-Benz to Brazil and established its first foreign location in São Caetano do Sul, south-west of São Paulo. The background to this move was a legal provision which required that, as from July 1960, vehicles produced for the Brazilian market had to be domestically manufactured to a degree of 90 percent of total weight. Therefore, in 1959, ZF founded ZF Fabrica de Engrenagens S. A. (today ZF do Brasil) as a joint-stock company under Brazilian law for the production of passenger car transmissions. Right from the start, ZF positioned itself as a neutral supplier delivering not only to Mercedes-Benz, but also to other manufacturers. In fact, the first transmissions that rolled off the new plant's construction line in 1959 were installed in the DKW Vemag, a legend in Brazil. The second-largest customer, ahead of Mercedes-Benz, was VW.

This strategy of following customers onto foreign markets is still valid today. After the foundation in Brazil, other production locations were added in Europe, South Africa, North America, and Asia. Today, the passenger car business has long gone global. In 2014, the technology group is represented in 26 countries worldwide with 122 production companies.

Internationalization of the German locations

The extension of production to Brazil coincided with the employment of foreign workers at the German ZF locations. This was due to the tight situation on the German employment and apprenticeship market in the fifties and sixties. Here, ZF benefited from the groundwork laid by the government. Between 1955 and 1968, the Federal Republic of Germany signed recruitment agreements with numerous countries aimed at attracting foreign workers for the German agricultural sector. The partner countries saw the bilateral agreements above all as a chance to alleviate unemployment at home. In the following years, the number of foreign workers at the German ZF locations increased significantly. In 1969, they made up more than 18 percent of the workforce. The first and initially largest group came from Italy, followed by colleagues from Spain, Greece, Yugoslavia, Austria, France, and Turkey. Many first-generation foreign workers spent their entire working lives at ZF, and foreigners became colleagues in an ever more international company.

ZF in China

The success of ZF in China can also be dated back to the sixties. At that time, the company achieved - initially very modest - export sales in the People's Republic of China and in Hong Kong. A more intensive cooperation began in 1979 when a Chinese delegation visited the ZF location in Passau and gained an insight into the production program for construction machinery. The return visit to China one year later generated the first order: ZF was contracted to supply synchromesh transmissions for the articulated buses operated by the Beijing Public Transport Corporation. Next, in 1981, a transmission license was granted to the China National Import Corporation, and in 1993 the first service branch was founded in Beijing.

After that, business picked up at a rapid pace. In 1996, ZF teamed up with Shanghai Automotive Industry Corporation (SAIC) to found ZF Shanghai Steering for the production of mechanical and hydraulic power steering systems. Today, the technology company has more than 20 production locations in China. Currently, all ZF divisions produce in China for the local market. The ZF product range includes driveline and chassis technology for passenger cars and commercial vehicles, construction machinery and agricultural machinery, transmissions for marine applications, and wind turbine gearboxes. The business is also flanked by 37 service centers in China. ZF's automotive customers include both Chinese manufacturers and the local companies of European passenger car and commercial vehicle manufacturers. For instance, in its Beijing plant for passenger car axle systems that opened in 2013, ZF produces complete front and rear axles for Beijing Benz Automotive, a joint venture of Daimler AG and its Chinese partner Beijing Automotive Industry Holding Co. Ltd. (BAIC).

Globally available ZF quality

Everywhere in the world, manufacturers are turning to the technology leader ZF when it comes to driveline and chassis technology for modern passenger cars. They expect high product quality worldwide. With its experience of setting up local production facilities in all key automotive markets, ZF has also created an efficient supplier network. Depending on order volumes, components come from other ZF locations or are also increasingly being sourced from local suppliers. The upshot is that ZF has developed important strategic partners in all key markets over the past few years. The Group also maintains an intensive partnership with all its local suppliers. Thanks to excellent collaboration in a region or a country, local suppliers are frequently also qualifying themselves for global business.

Tailor-made for the markets

ZF also adopts the "Local for Local" principle for engineering. Engineers at the ZF development locations are increasingly processing important product or application development packages locally – considering market-specific requirements in the process. "Design to Market" on the one hand involves meeting local cost structures in each country without compromising on functionality and the hallmark ZF quality. On the other, technical specifications have to be adjusted to market conditions: Commercial vehicle transmissions have to be tuned to actual engine torque and average transport weights; shock absorbers designed to meet typical load profiles. ZF has a well-oiled international development network to fulfill these tasks. The main development locations Friedrichshafen, Dielingen, Passau, Schweinfurt, Schwäbisch Gmünd, Northville near Detroit (USA), Pilsen (Czech Republic), and Shanghai (China) are in contact with several customization locations near to the large, in-country ZF plants. Jointly, they devise specific solutions in product design.

Global service network

What also played a major role in the internationalization of ZF was the founding of service and customer services centers in all the world's key markets. Even before the start of the first overseas production, they were a feature of the Group's export business. As early as 1960, ZF generated an export share of 17 percent. The first customer centers for ZF products were established in 1964 in Melbourne, Sydney, and Adelaide. That made it possible there to have ZF transmissions overhauled and spare parts delivered within 24 hours. Further service centers around the globe followed. In 2008, ZF brought together the two activities aftermarket trading (ZF Trading) and service (Sales and Service Organization) to form the new Business Unit ZF Services, which has since then handled the global aftermarket business with spare parts as well as all services and customer service activities of the company. In addition to spare parts for driveline, chassis, and steering technology, this also includes the entire service range: remanufacturing, repair, diagnosis, and field service, as well as original equipment of vehicle manufacturers on behalf of the divisions, plus services and service strategies for workshops.

MEDIA