ZF Batavia LLC, a recently launched US joint venture between Germany's ZF Friedrichshafen AG and Ford Motor Co., will produce up to 1 million continuously variable transmissions by 2005.
It will not merely supply Ford's worldwide demand for CVT production, but for any other carmaker ZF seeks.
CVTs are expected to see increased demand in the coming decade. The technology relies on two variable-diameter pulleys driving a metal belt to create an infinitely adjustable, shiftless transmission.
Such transmissions increase fuel economy by 10 to 15 percent while reducing emissions. And they have design advantages for front-wheel-drive cars with transverse-mounted engines.
ZF Batavia was conceived two years ago to combine ZF's early expertise in CVT technology with Ford's expertise in high-volume manufacturing. ZF wanted more US manufacturing capacity. Ford's 18-year-old Batavia, Ohio, transaxle plant offered a fast start-up.
Batavia already was the source for conventional front-wheel-drive transaxles used in the Ford Contour and Mercury Mystique in the USA, and the Ford Mondeo in Europe. The joint venture would take over that contract.
'This installation needs to sell CVTs on the world market, not just to Ford, and only will be successful if it is a leader in efficiency,' said Klaus Bleyer, president of parent company ZF Group.
Bleyer said the Ohio venture would be the key contributor to ZF's North American sales growth for the next year or two. Last year, ZF achieved North American original-equipment sales of $945 million. The volume is expected to nearly double by the end of the year.
ZF, which has two CVT products with a third heavy-torque unit under design, already has lined up a contract with Fiat, and expects to gain a contract with a German carmaker soon.
The Ohio venture has a unique structure. Although ZF owns 51 percent of the operation, Batavia's 1,400 workers remain Ford employees. ZF also contributed undisclosed amounts of capital to the Batavia operation.
CVT's made their mark in Europe on small cars like the Nissan Micra, but suppliers say in future they will be used for bigger cars in the lower medium and upper medium segments.