Tier One component maker ZF has opened a new factory producing passenger car axle sets in Kulim, Malaysia, supplying the nearby BMW and Mini assembly plant.

Kulim is about 350km north of the capital Kuala Lumpur. The new plant employs 74 people.

"The opening in Kulim shows that ZF establishes production locations in markets with potential at an early stage," said CEO Stefan Sommer at an official launch ceremony today (27 November, 2013).

"Just as in Thailand, where ZF started axle assembly for passenger cars 11 years ago, Malaysia is among the so-called 'next-15 states'. Experts believe that these countries will see a significant increase in automotive demand by 2020. Therefore, many manufacturers and suppliers are already establishing production capacities on site to have a head start for the foreseeable market dynamics."

The Kulim plant has started with assemby of completely knocked down (CKD) axles for several BMW and Mini models.

"The new plant is an expansion of our worldwide network of axle production locations. It benefits from the production capacities that are already available in the region and from our experience in Asia-Pacific," said Peter Holdmann who runs ZF's international passenger car axle systems business which is part of the supplier's car chassis technology division.

ZF axles are supplied to automakers just in time and just in sequence. It now has 16 plants producing complete axle sets close to customers, with eight of those in the Asia-Pacific region.

ZF opened its first Asia-Pacific office in 1981 and has run the region from Singapore since 2005.

In 2012, the group booked sales of EUR3.18bn in the region – with China, the most important individual market, contributing EUR2.1bn. The supplier now employs around 8,000 employees in the region and expects further growth.

"In this context, the emerging 'next-15 states' play an important role," ZF said.

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