DETROIT INTERVIEW: ZF Friedrichshafen CEO Stefan Sommer
"We see hydraulic steering being almost totally replaced with electric steering."
ZF Friedrichshafen CEO, Stefan Sommer, recently headed the German supplier's presence at the North American International Auto Show in Detroit. He took time out of his schedule to talk to Simon Warburton.
j-a: To what extent does North America now play a key role in ZF's business?
SS: "North America is currently the most important market for development. It is a technology development market. Besides Europe, North America is the most important market.
"This is not because the car population is going up - there is a big demand for new cars but also we have made some decisions to localise here and this really meets market requirements.
"The European market is more a double clutch market and the US has the perception of double clutch as towing. We recognise the US is an automatic transmission market.
"It is not only transmissions, we have significantly invested our capacity in axles, so we ramped up this business and last year introduced electric steering.
"Last year we created 700 jobs in the US and this year we will continue. I am pretty confident we will fulfil our growth this year and maybe not be too dependent on overall economic development in the world."
j-a: Are you now part and parcel of the North American economic landscape?
SS: "The commitment to North America is there. We have a new plant in South Carolina with almost 800,000 transmissions, 22 locations in the NAFTA region, 16 in the US and are in the area where we are needed.
"We significantly grew our business with axles and delivered last year 1.3m units [while] we successfully launched electric steering in the US. This is future technology [for] which we are seeing 20m units.
"We see hydraulic steering being almost totally replaced with electric steering. It is also driving safety, comfort and fuel efficiency.
"We had a record year in 2012 - record investments in our products and this makes me very confident we have a good contribution for the American auto industry.
j-a: How key is Chrysler to your North American operations?
SS: "Chrysler is a very important partner for us here in North America - we will grow our business [with them]. They have the right cars and our technology is a good fit."
j-a: Punch Metals recently won the bid for General Motors' Strasbourg powerplant site - were you disappointed not to have succeeded?
"We did not really compete for Strasbourg - it was our planning - together with Punch - it would work as a kind of workbench for us. We provide a certain volume to them and they are in a better situation to operate in France than we are.
"It was no surprise for us and it was more or less our intention to do it like this. Demand in the market for this is higher than we can currently provide.
j-a: To what extent would you like to see common trading standards applied between the EU and the US?
"We are recommending to [VDA president] Matthias Wissman what he should [say] to the German government. "Of course we would like to strengthen our export capability and have a free trade agreement.
"Wissman has a view if we have to homologate our technology, we are doing double work. In the end, this double work costs money and the consumer has to pay for it. There is clear economic interest behind that.
"If you look at safety regulations such as tyre pressure monitoring, they spend billions of dollars which you do not need in Europe.
"If it gets out of balance then you are rapidly talking about billions - Wissman understands both sides."