ZF chief Q&A: European automakers, suppliers must cooperate closely to beat of the Asian challenge

Friedrichshafen. ZF chief executive officer Siegfried Goll is demanding closer cooperation between European suppliers and automakers to reduce costs and beat off the challenge from Asian manufacturers.

Q: Mr. Goll, are automakers stepping up price pressures on supply companies?

A: Yes, it has become tougher. Some automakers demand price reductions of three to five percent a year, over the period of three years. That cannot be realized.

Q: How can costs be reduced?

A: It should be possible to increase the number of basic components and then develop them to manufacturers' particular technical specifications.

Q: Can you give an example?

A: There are a lot of different concepts for transmissions. We must not allow the variety to increase any further. Instead we have to reduce the variety. In future the distinction between different transmissions could be in the software or the way they are operated.

Q: Is there more cost saving potential in internal processes?

A: There is still potential in manufacturing, work processes and logistics. Costs could also be reduced if original equipment manufacturers and suppliers discussed performance specifications and requirements more intensely and at an earlier stage. Then we would be able to point out earlier how these specifications and requirements affect costs. And we could discuss if a certain feature is really necessary or if it would just be "nice to have."

Q: Recently the development of electronic steering systems cost ZF more money than originally planned. Why?

A: You are right. No one at ZF expected these high development costs. On one hand it was due to our own miscalculation. On the other hand there were changes that were noticed only during the development process or that needed to be made because our customers demanded them.

Q: What do you believe is the biggest challenge for the European automobile industry in the medium-term?

A: The European automobile industry has to remain the world's No. 1. We must defy the challenge of the Asian manufacturers, who offer an interesting model range and excellent product reliability and quality. Suppliers and original equipment manufacturers have to fight together.

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