SINGAPORE - ZF Friedrichshafen is targeting major growth in Asia.
Klaus Bleyer, CEO of the German chassis and powertrain system supplier, expects the region to account for 20
percent of ZF's sales 'in the foreseeable future.'
He said Asia was the only area where ZF saw strong growth in the next three years.
He expects the European and North American markets to stagnate or decline, but said sales in Asia would increase rapidly.
Bleyer was speaking at the opening of a new sales and service center for ZF Southeast Asia Pte Ltd. here.
After reaching $140.8 million in 1999, ZF's Asian sales will climb to about $229 million this year, he said. That would take ZF back to its 1997 sales level, achieved before the Asian economic crisis hit. Bleyer said Asia sales likely would account for about $317 million by 2002.
But Asia still makes up only about 4 percent of ZF sales - a share Bleyer said is comparable to that of many other European companies, both automotive and nonautomotive.
But, he said, 'Long term it is not unreasonable for the area to play the role of a NAFTA or a Mercosur.'
NAFTA is the North American Free Trade Agreement among Canada, the United States and Mexico; Mercosur is the trading region that takes in Brazil, Argentina, Uruguay and Paraguay. Europeans traditionally have invested in Mercosur or NAFTA, said Bleyer, 'but it doesn't have to be that way.'
ZF currently has four manufacturing operations in China, three in India, and one each in Malaysia, Taiwan, Thailand and Japan.
Three of the operations are part of the ZF Lenksysteme GmbH joint venture in steering systems with Bosch.
The next ZF investment in the region is likely to be in Thailand, in the light-truck area. ZF could also invest in product areas where it is not yet present in China, such as car powertrain, Bleyer said.
He said opportunities in Japan were more limited as the pressure for change has been eased by the success of the Nissan turnaround.
ZF has been negotiating a link with Japan's Unisia JECS for steering systems since 1998, without success. 'We hope to get a result next year,' said Bleyer.
He said that the Japanese auto industry was still troubled by overcapacity. Overall, sales at the German group are expected to rise 17 percent for 2000 to $5.4 billion.