ZF at forefront of cutting-edge tech with commitment to China

· ZF China sales reached EUR 7.7 billion, up 10%.

· ZF is committed to China market with continued investment.

· ZF is in China to stay at the forefront of cutting-edge technologies. China's NEV is surging ahead and SDV revolution is in full swing. ZF plays a unique competitive advantage, empowering the advancement of China's automotive industry and growing together with customers.

· ZF is expanding its circle of friends and playing an increasingly important role in an open ecosystem.

On March 25, the 2023 China Development Forum opened in Beijing, where ZF Group Chairman and CEO Dr. Holger Klein shared perspectives on the China market and expressed commitment to the China market. The event also highlighted ZF's active engagement with the automotive ecosystem as well as its determination to bring cutting-edge technologies to China.

Mr. Stephan von Schuckmann, Member of the Board of Management, ZF Group, and Renee Wang, Executive Vice President, President of ZF China and Operation Asia Pacific, ZF Group, also attended the forum, held at the Diaoyutai State Guesthouse, communicating deeply and extensively with senior Chinese government officials and business leaders.

Sponsored by the Development Research Center of State Council, the China Development Forum is a national-level international forum, aiming at "engaging with the world for common prosperity". It is an important platform for dialogue among senior leaders of the Chinese government, global business leaders, international organizations and Chinese and foreign scholars. The theme of the current forum is "Economic Recovery: Opportunities and Cooperation".

Over the past three years, the global economy and the automotive industry have faced enormous challenges due to COVID-19, chip shortages, rising energy and raw material prices, inflation and regional conflicts. As we enter 2023, the Chinese economy is entering a recovery phase as the pandemic situation turns for better, and China announced a 5% GDP growth target during the "Two Sessions". Currently, the Chinese economy is moving forward under pressure and making steady progress, injecting positive driving forces to the world economy and boosting the confidence of multinational companies operating in China.

In face of difficulties, the industry has witnessed the perseverance, resilience and flexibility demonstrated by the ZF China team. 2022 saw ZF China's sales achieving 7.7 billion Euros, up 10 percent of the previous year. Since entering the Chinese market in 1981, ZF has gone through the historical stages of "Sold in China", "Made in China" and "Developed in China", and is on its way to "Led by China". Ten years ago, ZF had less than 6,000 employees in China, with sales accounting for only 10% of group sales. But now, ZF has a footprint of nearly 50 production locations, four R&D centers and nearly 240 after-sales service outlets in more than 20 cities in China, with over 20,000 employees and sales accounting for about 20% of its global sales.

As a Fortune 500 multinational company, ZF is not only among the top three automotive component suppliers, but also a leading global technology company dedicated to providing comprehensive system solutions and products for the automotive and industrial sectors, from software to hardware. "For ZF, China has become the home room to global technologies and functionalities, and a global innovation hub," said Dr. Holger Klein, Chairman and CEO of ZF Group.

With the wave of electrification, software and autonomous driving, the Chinese automotive industry is also witnessing a new round of disruptive changes, and new development themes are putting forward new requirements for the industry.

"ZF Group's sales in the Asia-Pacific region, which were only 3 billion euros ten years ago, reached 10.1 billion euros in 2022, more than 3 times as much as ten years ago. Today, ZF's sales in Asia Pacific, mainly in China, account for around 25 percent of the Group's global sales and we plan to increase this share to 30 percent by 2030," said Mr. Stephan von Schuckmann, Member of the Board of Management (BOM), ZF Group. "In China, we are always customer-centric. We understand the dynamics of the market and the needs of our customers, and we are constantly innovating our technology and business models to bring the most advanced technologies to the China market. We have grown ourselves while helping our customers expand their market share. As China's new energy vehicle industry surges and the software-defined vehicle revolution is in full swing, ZF will leverage its unique competitive advantage in this process to empower the development of China's automotive industry."

The Chinese automotive market accounts for more than 30% of the global market. As a top priority in the global market, ZF has been shifting its gravity to Asia Pacific in recent years. In 2022, ZF launched a series of new production and development projects in Jinan, Guangzhou, Shanghai Anting, Hangzhou, Shenyang, Zhangjiagang and Rizhao.

"As China's automotive technology develops rapidly and the ecosystem becomes more sophisticated, ZF will seize the opportunities along the transformation of China's automotive industry, continue to enhance its core technologies areas and the competitive advantage of its local independent research and development through extensive collaboration with OEM customers and technology partners. ZF will lead the new automotive industry with consistent upgrades to drive the growing market," said Renee Wang, Executive Vice President, President of ZF China and Operation Asia Pacific, ZF Group.