ZF to carve out passive safety systems division as independent unit

The global No. 2 in passive safety technology says independence of passive safety enables stronger growth and sustainable expansion of market position

Autocar Pro News Desk By Autocar Pro News Desk calendar 30 Oct 2022 Views icon8824 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
ZF to carve out passive safety systems division as independent unit

ZF has decided to carve out its Passive Safety Systems Division and set it up independently by the end of 2023. This decision is intended to open up new strategic options for action for the occupant protection systems business and is the result of a continuous review of the ZF portfolio.

In the course of the current transformation process in the automotive industry, ZF has evaluated and analysed the growing transformation business on the one hand and the growth potential of traditional business areas such as passive safety systems on the other. In a carve-out, the company sees the best conditions to generate stronger growth and a sustainable expansion of the market position of the world’s No. 2 in the passive safety technology business by involving external investors. 

Passive safety technology systems include airbags, seatbelts and steering wheels. They represent an independent business that operates largely unaffected of the transformation in the automotive industry and has high growth potential. However, additional investment resources are required to tap this growth potential.

The ZF Group’s decision to set up the Passive Safety Systems Division as an independent operation by the end of 2023 serves to give the division more strategic options for its future development and thus to achieve higher growth. This may include the entry of external investors who can improve access to additional growth capital. This option will sustainably strengthen the division’s claim to be the most innovative and forward-looking player in the market.

Repositioning of the passive safety systems business
“The Passive Safety Systems division has been a continuous success story for the ZF Group since the division was acquired in 2015. Over the past seven years, ZF has developed the division into the global No. 2 in passive safety systems. Due to the transformation of the mobility business, we are planning to reposition the safety business,” said Wolf-Henning Scheider, CEO of ZF Group.

At present, the Passive Safety Systems Division has a market share of around 25 percent of global sales of passive safety equipment, with significant potential for more. The comprehensive product portfolio includes both individual components and complete passive safety systems for various vehicle segments, ranging from small vehicles in the volume segment to the most sophisticated luxury vehicles.

Martin Fischer, member of the ZF Group Executive Board and responsible for the Passive Safety Systems division, added: “Strategically and financially, we are in a comfortable position with stable and decent profits. These are independent of the disruptive developments currently characterizing the automotive industry. At the same time, this business will benefit from the megatrends of increased vehicle safety and autonomous driving.”

The division’s sales in 2021 amounted to 3.8 billion euros (Rs 31,160 crore) . This represents growth of 8.6 percent compared to 2020, despite the impact of the Corona pandemic and the approximately 10 million vehicles that could not be produced due to disrupted supply chains and material shortages. Overall, order intake increased by 60 percent from 2018 to 2021, reflecting the strong market position.

 

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