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40 Years of ZF in China: A Worldwide Success

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ZF has been established in China since the 1980s. What happens in the Chinese market causes a stir worldwide.
Lars Weitbrecht, April 26, 2021
Lars Weitbrecht originally comes from the music and gaming industry, but in addition to holding a game pad or guitar in his hand, he also enjoys the power of the pen and the feel of the steering wheel.
ZF has a long history in China: In 1980, the Group made contacts with China for the first time. In 1981, ZF grants the first license and opens its first official office in Beijing in 1987.

Fast forward to 2021: Today, ZF has ‎around 40 locations in China with approximately 12,500 employees, generating sales of 6.4 billion euros in 2020 – almost 20 percent of the company’s global business. At Auto Shanghai 2021, ZF presented the next generation of its ZF ProAI supercomputer for the first time to the public. “In 40 years, ZF has gone through the journey from ‘Sold in China’, ‘Made in China’, ‘Designed in China’ to the point that one ZF Board Member leads the business out of China. With the dedication of our team members, the strengths of ZF’s global development network and trust by our customers and partners, we have been an active part of the Chinese automotive industry and social fabrics,” said Ms. Renee Wang, ZF China President and SVP Operations, Asia-Pacific.
“At ZF, we are determined to carry on our long-term commitment as we continue to invest in China and grow with the local society," said Shanghai-based ZF Board Member Dr. Holger Klein, whose responsibilities include leading the Asia-Pacific region. His appointment to the Board of Management in 2019 was also a milestone. For the first time in ZF's history, a Member of the Board of Management manages the business from China.
“In 40 years, ZF has gone through the journey from ‘Sold in China’, ‘Made in China’, ‘Designed in China’ to the point that one ZF Board Member leads the business out of China."
Renee Wang, ZF China President and SVP Operations, Asia-Pacific

From then to today: This path is and has been linked to many challenges, opportunities and developments.

A brief review:

The 1990s: ZF is establishing itself in China

The 1990s: ZF is establishing itself in China
Since the first business relations had been established, ZF continuously strengthened its presence on the ground. The 1990s in particular are characterized by many striking cuts. These years would be the first building blocks for long-term success.
A unique requirement in China: Western companies can only enter the market through joint ventures with Chinese partners. The first of these is concluded by ZF in 1993 with Beijing North Vehicle Works (NVW).

In the Beijing district of Fengtai, a joint service center is set up in which ZF holds a 70 percent controlling interest. After a two-year negotiation phase, the Group enters the first production company in the commercial register with ZF Shanghai Steering Co. Ltd. in 1994. In the same year, it starts production at its own location in Langfang. But ZF products find their way not only into passenger cars, but also into commercial vehicles and construction machinery. Thanks to many infrastructure projects in China, the demand of the respective manufacturers is guaranteed. ‎In 1995, ZF opens its first technology plant in Liuzhou and its first chassis plant in Shanghai.

The 2000s: New heights and new players

The 2000s: New heights and new players
At the beginning of the new millennium, the global economy is boosted by new digital opportunities across industries. The automotive industry is also growing, especially in China. ‎Chinese end customers have always been more enthusiastic about technology than Western buyers. Megatrends such as e-mobility, autonomous driving and connectivity are very popular in China. New technologies are promoted by the state at an early stage, especially if they reduce emissions. This attracts established manufacturers from Europe and the USA to the Chinese market – who are usually followed by their suppliers, such as ZF. Chinese brands also want to make these high-tech features available to their customers and see suppliers such as ZF as development partners.
The ZF transmission plant in Shanghai has been producing automatic transmissions since 2004.

As of 2010: From crises to growth

As of 2010: From crises to growth
As the markets slowly recover after the financial crisis, ZF seizes the opportunity and relies on expansion. China is therefore gaining even greater focus. In addition to the sales market for vehicles, there is once again a boom in logistics, the construction industry, infrastructure and agriculture. Because ZF has innovative system solutions in its portfolio for all of these segments, the company can exponentially strengthen and expand its position in many industries within one country.
In 2012, construction on a Beijing plant for the assembly of passenger car axles begins, and production starts in 2013. This represents the first ZF production location in the Chinese capital. In 2014, the technology center moves to Anting, Shanghai, followed by an expansion in 2017.

The here and now: ZF and China continue on the road to success

The here and now: ZF and China continue on the road to success
Today, many future technologies are coming onto the road in China first. “Today, we are developing a great number of products and functionalities here in China and equipping them first in COEM models”, said Dr. Klein. “ZF is determined to continue to invest in China and continue to grow as China grows”, said Renee Wang.

The next milestones are already in sight: The Asia Pacific COBOT Center in Shanghai, where collaborative robots will be introduced, will start operations soon. Strengthening the local R&D setup, ZF’s Guangzhou development center started operation in Q4 of 2020. And ZF’s new Asia-Pacific headquarters office in Shanghai is scheduled to commence operations in June in 2021.
“With the ZF Asia-Pacific headquarters and three development centers strategically located in China, we are ready to elevate our support to our global and Chinese customers in realizing Next Generation Mobility here in China, for China,” said Ms. Renee Wang.
Dr. Holger Klein, ZF Board Member, and Renee Wang, ZF China President and SVP Operations in Asia Pacific, present the new ZF ProAI supercomputer at Auto Shanghai 2021.

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