German supplier ZF Friedrichshafen AG is looking for double-digit growth in the Asian market next year. Siegfried Goll, CEO of the global supplier of transmissions, steering systems, suspension components, axles, clutches and dampers, talked about ZF's future with Automotive News Europe's Edmund Chew in Friedrichshafen, Germany.
What growth do you see in China or Korea this year?
We are aiming at 20 percent annual growth in Asia over the next five years. Around 5 percent of our sales are currently generated in this region and we would like to increase this to 10 percent. We are clearly making progress in Asia, particularly in China where we already have 11 production plants. In the past, we focused on Shanghai, but we are now moving toward Changchun and Shenyang. We are planning to continue our growth strategy in Asia and are looking beyond manufacturing.
Are automakers outsourcing more?
Some OEMs have adopted a very aggressive outsourcing strategy, others are more restrained. Some are even bringing operations back in-house. We're seeing the full spectrum. We expect this to result in new opportunities for our chassis and driveline business. The fact that we have developed an attractive product program plays an important role. Our driveline and chassis systems make us a viable partner for the automotive industry as a supplier of system solutions.
There has been a lot of talk about the status of Germany as a production location. What do you think needs to be done?
We need a more flexible situation than we have today and are working on this with our employees. We need to make more progress on reducing costs, especially in the area of personnel. This will have an impact on manufacturing operations in Germany.
Of course, we support the idea of keeping production here, but there are limits. The way to remain competitive is to lower labor costs by increasing productivity, improving the overall process chain and working with efficient suppliers.
Do you see possibilities for further improvement?
Yes. But things are becoming increasingly difficult and we will need more support from the employee side to integrate flextime work schedules and optimize the whole production chain. We need to outsource more of the basic operations. This can be done in Germany or in countries where labor costs are lower.
What are you doing in eastern Europe?
We are currently building up our car steering systems business in Hungary and will be looking at other production sites in Eastern Europe. Not everything is going to stay here in Germany. We definitely support Germany and realize the importance of working intensely on optimizing our operations here.