The ZF Corporate Strategy

Operational performance is the primary lever to restore competitiveness, strengthen cash generation, and ensure we achieve consistent customer satisfaction leveraging a competitive set of manufacturing and R&D locations. At the end of 2025 we launched a group-wide performance program (PERFORM26), consolidating several past initiatives into one unified framework with standardized tools, domain-driven metrics, and structured review cycles. PERFORM26 is designed to sharpen our focus on operational performance across all Divisions.

Another important measure to strengthen our financial base is the spin-off and sale of parts of the company where we are not among the strongest players in the market or where there are few synergies with other areas of the company. When they are independent, the respective business units are more flexible in terms of further growth opportunities and targeted investments.

In 2025, we took a major step in sharpening our strategic portfolio by signing an agreement to sell our passengercar ADAS/AD business to Harman, enabling the business to fully leverage its growth potential while helping ZF reduce financial liabilities and focus resources on core technologies. This divestiture represents an important milestone in ZF’s broader realignment and strengthens the company’s financial foundation for futureoriented investments.

In addition to divesting the passenger-car ADAS/AD business, we will establish our wind power division as an independent entity. This will enable us to position it even more agilely and successfully within the market, thereby opening up additional strategic opportunities

At the same time, we made pivotal decisions for our passenger car powertrain division, confirming that its established transmission business remains a core pillar, while opening the door to selective partnerships in emobility to enhance competitiveness and secure longterm growth.

Our objective is clear: allocate our limited capital with discipline to the most attractive businesses, customers, and regions - guided by strategic relevance and financial attractiveness.

We hold strong market positions across many of our industries. For example, we are the leading supplier in the commercial vehicle segment worldwide. Our key to success is that we have the broadest product and technology portfolio in the market, paired with the ability not only to deliver products, but also to integrate them into system landscapes and our customers’ vehicle environment. In industrial technology, we also rank among the leading suppliers and are one of the top 3 in the key segments – such as construction and agricultural machinery, special vehicles (including Defense), and marine applications. Our Aftermarket Division is the global number 2 in the spare parts and service business for passenger cars, trucks, busses and coaches as well as construction and agricultural machinery. In the spare parts market for commercial vehicles, we are even number 1.

We are also one of the leading suppliers in many passenger car technology fields, and the passenger car business will remain an important segment for ZF in the future. However, its share in total sales, currently around 65 percent, will decrease in the next decade. This is not only due to changes to our portfolio (see ADAS/AD passenger car) but also due to a disciplined allocation of resources toward businesses that structurally offer higher financial returns.

Strengthening our focus also means strengthening our focus on customers to improving our competitiveness, guiding our priorities, and ensuring that we direct our resources toward what creates the greatest impact for them.

We want our business units to develop optimally and achieve a leading competitive position. Therefore, we are evaluating the development potential of each individual division to determine in which configuration they have the best future prospects. We need more empowered and agile divisions with flatter hierarchies that can make decisions independently – allowing them to better meet the demands of their market segments and customers.

In addition, with ZF Lean Group we are implementing a clear transformation of our corporate functions. The program streamlines structures, eliminates nonstrategic activities, and strengthens crossfunctional collaboration, ensuring that corporate functions operate with greater efficiency, focus, and impact.

This includes our strategic approach “local for local.” In growth regions such as Asia-Pacific, India and North America, we are further expanding our local production and development activities to respond quickly and efficiently to local market trends and customer requirements. We want to make the individual regions even more independent. The aim is to further increase their share of sales and achieve sustainable growth. Various projects have already started. China, for example, is now a particularly strong and independent region with a total of around 20 locations and its own raw material suppliers.