ZF says the global pandemic is accelerating changes which were already occurring in the automotive sector, particularly in the electrification field.
The Friedrichshafen supplier made the comments as it unveiled first-half sales down 27% to EUR13.5bn (US$15.9bn), noting it expects its annual profit to be negative.
“The global pandemic has changed the lives of most people basically overnight,” said ZF CEO, Wolf-Henning Scheider. “More than half of humanity is affected by restrictions. The crisis is accelerating change that is already underway in the automotive industry.
“Electrification has received a new impetus, especially in Europe and we will change to electrification faster than we thought before. We want to protect the health of our employees, that is the most important thing for our company.
“We have taken extraordinary efforts in protecting the supply chain. We used the experience from crisis management to improve our cost structure in the long term; in the first half of the year we reduced our cost [s] by EUR1bn. Our plants in China are almost fully utilised, but this does not apply in our plants in North and South America.
“In Friedrichshafen, we have very strong demand from Chinese customers and we have high capacity utilisation. [However] Many of our plants are facing weak customer demand and are subject to very high volatility.”
ZF recently announced a further step in the company’s transformation towards e-mobility. On 1 January, 2021, a new division will be formed from the current Car Powertrain Technology and E-Mobility divisions to offer customers electrified driveline solutions from a single source.
In the future, ZF will not invest in transmissions exclusively designed for internal combustion engine vehicles, but will focus its development activities on flexible platform technologies for long-range plug-in hybrids and purely electric vehicles.
“The corona pandemic is noticeably accelerating the transformation of the automotive industry – we expect electrification to come even faster now,” added Scheider.
“We accept this challenge and are decisively driving the necessary changes at ZF in order to better participate in the growing market for electrified car drives.”
“The newly formed division will be able to leverage the system advantages of both divisions and offer vehicle manufacturers a comprehensive electrified drive portfolio as well as worldwide development and production capacities under one roof.”