SHANGHAI -- German supplier ZF Friedrichshafen AG projects sales of 1.1 billion euros ($1.3 billion) in China this year, up from 970 million euros in 2009.
The company, which makes transmissions, driveline and chassis components, expects to capitalize on the robust Chinese operations of Volkswagen AG, Daimler AG and BMW AG. ZF also expects to increase sales to domestic Chinese automakers --especially those that want to export.
To service customers in China, ZF last week opened a new 20 million euro technical center and headquarters in Shanghai. The 10,000-square-meter facility employs 250 workers, says ZF China President Ye Guohong. "Our main purpose is to develop products for customers' needs in a short time frame," Ye said.
While ZF currently produces much of its product portfolio in China, it still imports the electronics from Germany. But its campaign to buy more components from suppliers in China is making some progress.
ZF now buys locally produced steel for its transmissions and gears. Ten years ago, it was tough to find steelmakers who could meet ZF's quality standards.
Currently China accounts for 10 percent of ZF's global sales, which totalled 9.4 billion euros last year. By 2015, China could account for as much as 15 percent of sales, says ZF CEO Hans-Georg Haerter.
Moreover, automakers in China are prepared to adopt cutting-edge technologies. Says Ye: "The main market for our latest products is in China now."