ZF and BAIC form JV for chassis system assembly

ZF Friedrichshafen AG and Beijing Automotive Industry Corporation (BAIC Group) have for the first time founded a joint venture for developing and assembling passenger car chassis systems. Dr Stefan Sommer, CEO of ZF, and Xu Heyi, chairman of the BAIC Group as well as its passenger car division BAIC Motor, signed the joint venture contract in Friedrichshafen on October 9.

With more than two million vehicles delivered in 2013, the Beijing Automotive Industry Corporation (BAIC Group) is China’s No. 5 automotive manufacturer.

“We are very pleased the BAIC Group trusts our products,” said ZF’s CEO Sommer during the signing of the contract. “This cooperation is another major step forward in the Chinese market, which is extremely important for ZF.” ZF has been conducting business with Beijing Benz Automotive (BBAC), a joint venture of BAIC Motor and Daimler AG, for several years. Specifically, ZF supplies complete front and rear chassis modules for the current Mercedes C Class, E Class, and GLK models produced in China.

The joint venture, in which ZF holds a 51-percent share, will be located in the Beijing Economic and Technological Development Area (BDA) to the south-east of China’s capital, Beijing. Starting next year, engineers and plant planners will kick off development work and prepare the installation of production equipment; the launch of chassis module assembly is scheduled for the next years. Then about 200 employees will assemble front and rear chassis modules with a starting capacity of 200 000 units for just-in-sequence delivery. The customers will be the various car brands of the BAIC Group. The two partners are investing more than €10 million in the new plant, which will cover an area of 16 000 square metres.

“ZF is an important and reliable partner for us,” said Xu Heyi, Chairman of the BAIC Group as well as its passenger car division, BAIC Motor. “The new joint venture means we will cooperate with an experienced automotive supplier in the passenger car chassis technology field.” He also stated that both companies wanted to examine whether there is scope for cooperation in further areas.

ZF in China

In 2013, ZF generated sales of €3 billion (Rs 23,307 crore) in the Asia-Pacific region, with 7,500 employees at 37 locations in 14 countries. This was an increase of 15 percent compared to 2012. ZF has been active on the Chinese market since 1980 and has been producing locally since 1994. In China, as part of the Asia-Pacific market region, ZF generated sales of some €2 billion (Rs 15,538 crore) last year, with 5 700 employees at 23 locations. This year, ZF again expects significant growth in China and the Region of Asia-Pacific together with a further increase in staff. The R&D Center in Shanghai, set up in 2005, is one of the technology company’s eight main development locations worldwide.