Deal with BMW: ZF Wins Multi-Billion Euro Order for Transmissions

| Editor: Alexander Stark

It's the biggest order in the company's history: In the coming years, ZF Friedrichshafen will supply eight-speed automatic transmissions to BMW. The contract has a volume in the tens of billions. The supplier also presented its business figures recently.

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ZF Friedrichshafen has received a multi-billion order for transmissions from BMW. Specifically, it's about eight-speed automatic transmissions.
ZF Friedrichshafen has received a multi-billion order for transmissions from BMW. Specifically, it's about eight-speed automatic transmissions.
( Source: ZF )

Some suppliers have had little positive news to announce about the last fiscal year: At Schaeffler, Mahle, Leoni or Osram, things are not running smoothly right now, some companies are cutting hundreds of jobs and presented austerity plans. The colleagues from Lake Constance, on the other hand, were able to report no less than a record order at their annual press conference: BMW ordered eight-speed automatic transmissions from ZF Friedrichshafen, the contract is worth billions. It also includes hybrid transmission models.

This underscores the constant pleas of ZF CEO Wolf-Hennig Scheider in favor of hybrid technology: In recent months, he had repeatedly called for a "people's hybrid" and had even taken on VW boss Herbert Diess, who categorically relies on purely battery-operated vehicles. In Scheider’s view this is to expensive. However, the new eight-speed automatic transmission is not yet the much-discussed "people's hybrid": "We are working on this in parallel," says the ZF CEO.

The volume of the order is not clearly defined because "the duration and purchase quantity are linked to the development of the vehicle market," explains Stephan von Schuckmann, who heads the Powertrain division at ZF, to the Frankfurter Allgemeine Zeitung.

Significant Increase in Hybrid Drives Planned

The Munich-based car manufacturer wants to increase its share of hybrid and plug-in hybrids with an electrical range of more than 100 kilometers in the models with the previous eight-speed automatic transmission from currently 5 to up to 50 % - above all, in order to comply with the further increasing exhaust emission limits. ZF CEO Scheider refers to the strict CO2 targets until 2030: "Individual mobility will become more expensive for end consumers."

Electric Power in the Gearbox

“8HP”: ZF markets its eight-speed converter transmission under this abbreviation. Hardly any other translation works this quickly, inconspicuously and smoothly. Since its premiere twelve years ago in the BMW 7 Series the Friedrichshafen-based company has already sold the transmission to VW, Aston Martin, Honda and Fiat-Chrysler, among others, in double-digit million volumes.

The technology has been continuously improved over the years and production of the third generation has just started. In addition to the plants in Saarbrücken and Gray Court (USA), it will also be manufactured locally in Shanghai for the numerous Chinese customers such as Great Wall, BAIC, Brilliance and Dongfeng. The production start of the optimized fourth generation is scheduled for 2022.

Apart from the 14 % increase in performance and the further slight reduction in fuel consumption, the decision-makers at BMW headquarters were probably particularly impressed by the improved electrification of the new 8HP transmission: The automatic transmission is already hybrid-capable, but in future the power electronics, which were previously located outside the transmission, will move into the transmission housing without restricting space. The car manufacturer therefore needs less installation space, which is known to be very limited.

The electric motor produced by ZF is also integrated directly into the transmission housing and has become much more powerful: The peak electrical performance is now 160 kW/218 hp and has thus almost doubled. Depending on the battery connected, the transmission is suitable for 48-volt mild hybrids (MHEV), which use electrical energy primarily for boosting, as well as for high-voltage plug-in versions (PHEV), which can travel a certain distance purely electrically thanks to a larger battery. "We consider the plug-in hybrid as an attractive technology - at least until the end of the next decade," said Scheider at the annual press conference.

ZF and BMW: A Lot of Flexibility for BMW

In addition, ZF continues to offer the 8HP as a conventional converter. Advantage for the manufacturer: ZF offers them the greatest possible flexibility. Since no one can foresee how fast the progress of electrification will proceed, the possibility of shifting the order quantity between the three variants in line with demand and at relatively short notice is likely to have convinced BMW as well. The car in which the latest automatic generation will make its debut has not yet been determined. After its facelift this year, however, the flagship 7 series could be the first in three years.

ZF CEO Scheider: "This won't be an Easy Year for the Automotive Industry."

ZF Friedrichshafen also presented their business figures. The comparatively strong euro has thwarted the automotive supplier. In 2018, revenues increased by 1.3 % to € 36.9 billion, said CEO Scheider in Friedrichshafen on Lake Constance. However, currency effects were strongly felt - as was the sale of the Vehicle Operating Systems division. Under its own steam, sales had grown by around 6 %. A strong euro makes exports to non-EU countries more expensive, which may have an impact on demand there. In addition, revenues generated abroad are lower when converted into euros.

With € 2.1 billion, operating profit (underlying EBIT) in 2018 was below the prior-year level (€ 2.3 billion). The bottom line profit fell from just under € 1.2 billion in the previous year to around 965 million euros. Here, too, the strong euro and higher material prices had made themselves felt, said CFO Konstantin Sauer. The supplier has increased the budget for research and development by 11 % - adjusted this amounts to € 2.5 billion (previous year): € 2.2 billion). 17.000 employees are involved in R&D projects worldwide.

For the current fiscal year 2019, ZF CEO Scheider anticipates slight growth in a continued tense market environment: "This surely won’t be an easy year for the automotive industry."

With material from Spotpress and dpa

Original: Svenja Gelowicz / Translation: Alexander Stark

This article was first published by Automobil Industrie.

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Johannes Messer – Consulting GmbH; BMW; ZF Friedrichshafen; Brose; Pixabay; Svenja Gelowicz/Automobil Industrie; Berylls; Nemak; ZF; gemeinfrei; Kuka; Tobias Hase/EOS; MPA Stuttgart; Daimler; Amendate; Boston Consulting Group; Unsplash; Messe Düsseldorf / ctillmann; NuernbergMesse / Heiko Stahl; NuernbergMesse / Frank Boxler; NürnbergMesse; Bühler Group; Marposs