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      04-10-2019, 04:10 PM   #1
cbertels
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Latest BMW transmission purchase yields ZF its biggest order ever

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April 4, 2019

FRANKFURT -- ZF Friedrichshafen has won an order worth billions of dollars from BMW to supply gear boxes, giving the German auto supplier breathing room as it prepares to navigate the switch to electric vehicles.

The order for automatic gear boxes for internal combustion engines, including a hybrid variant which combines fuel with electricity, is the biggest in ZF's history, CEO Wolf-Henning Scheider said on Thursday.

Higher r&d spending, increased material costs and a weaker automotive market chipped away at ZF's operating profit in 2018, with a fall of 9 percent to 2.1 billion euros ($2.4 billion) on sales of 36.9 billion euros.

ZF said the market would remain challenging this year due to ongoing political and economic uncertainties and forecast sales of between 37 and 38 billion euros.

The company is betting on strong demand for hybrid vehicles as the auto industry shifts away from the combustion engine towards electric cars in a bid to reduce emissions from driving.

Hybrid vehicles are expected to appeal more to consumers than electric cars as they help overcome so-called "range anxiety" or the fear of running out of power before reaching a charging station.

"We see plug-in-technology, at least over the next decade, as a good solution for customers," Scheider said.

ZF last week agreed to buy U.S. rival Wabco for more than $7 billion, an acquisition it has long targeted to bolster its expertise in autonomous-driving technologies.

Scheider said ZF would specialize in autonomous driving for commercial vehicles from van size upwards, such as robotaxis, as it believes the technology will be too expensive for private passenger cars.

"On the other hand, for commercial vehicles, it is a technology that pays for itself very quickly," he said.
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      04-11-2019, 07:22 AM   #2
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I wonder why BMW doesnt just buy ZF. I'm sure it has been considered! They seem to make really awesome transmissions but perhaps having that as an exclusive is not a differentiator enough with most customers to make the ROI make sense.
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      04-11-2019, 08:43 AM   #3
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Quote:
Originally Posted by cbertels View Post
Interesting. Not sure how this differs from the current process of replacing the torque converter with the electric motor in the current BMW PHEVs.
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      04-11-2019, 09:19 AM   #4
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Quote:
Originally Posted by duky View Post
I wonder why BMW doesnt just buy ZF. I'm sure it has been considered! They seem to make really awesome transmissions but perhaps having that as an exclusive is not a differentiator enough with most customers to make the ROI make sense.
Too expensive ...
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      04-11-2019, 10:29 AM   #5
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Quote:
Originally Posted by duky View Post
I wonder why BMW doesnt just buy ZF. I'm sure it has been considered! They seem to make really awesome transmissions but perhaps having that as an exclusive is not a differentiator enough with most customers to make the ROI make sense.
Real answer is probably that euro monopoly laws would never allow it as zf is supplier to competitor brands.
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      04-11-2019, 11:38 AM   #6
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Quote:
Originally Posted by duky View Post
I wonder why BMW doesnt just buy ZF.

ZF has more employees than BMW
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      04-11-2019, 01:18 PM   #7
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Quote:
ZF is a global leader in driveline and chassis technology as well as active and passive safety technology. The company has a global workforce of 146,000 with approximately 230 locations in some 40 countries. In 2017, ZF achieved sales of 36.4 billion and as such, is one of the largest automotive suppliers worldwide.
Probably take more than BMW writing a check....

Then every BMW competitor currently using ZF components is actively looking for other suppliers.
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      04-11-2019, 09:38 PM   #8
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That’s not encouraging...
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      04-12-2019, 07:27 AM   #9
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Wow interesting ok didn't realize they were so big. My comment about buying ZF was more about in general pursuing some sort of M&A though
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      04-12-2019, 10:51 AM   #10
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Quote:
Originally Posted by duky View Post
I wonder why BMW doesnt just buy ZF. I'm sure it has been considered! They seem to make really awesome transmissions but perhaps having that as an exclusive is not a differentiator enough with most customers to make the ROI make sense.
Bad purchase... with electric on the rise, these types of transmissions will see lower and lower orders over time.
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      04-12-2019, 10:52 AM   #11
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LOL at the people suggesting that BMW buy ZF.
ZF is a big fish.



ZF last week agreed to buy U.S. rival Wabco for more than $7 billion, an acquisition it has long targeted to bolster its expertise in autonomous-driving technologies
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      04-12-2019, 11:02 AM   #12
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I love the ZF tranny on my m550i!! GO ZF!!
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      04-12-2019, 11:14 AM   #13
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BMW vision for EVs

BMW first investigated the shift to EV in 2009/10 with the Mini E and then in 2012 with the Active E. These were followed by the i3 in 2013 and i8 in 2014.

My guess is that BMW are thinking about the move from gas to EV based on a much longer learning/investment/return cycle compared to other ICE auto manufacturers - they are not reactive to Tesla (and others on the scene now). This deal with ZF is indicative of their view of how the transition to EVs is going to play out -- long transition time with a lot of overlap with plug-ins.

I'm not sure if their thinking is right, but I am glad that they are taking a different approach to the other car companies.

If they are right, they are going to be really well positioned to make the transition to EV -- over a longer term compared to what the other ICE auto manufacturers are implementing.

If they are wrong, they will fall behind.

My personal sense is that they are on the right path - other ICE auto manufacturers are rushing to switch EVs (and they'll suffer for it).
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      04-12-2019, 11:32 AM   #14
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BMW is for sure a huge ZF customer regarding automatic transmissions. (manuals come from getrag, including dkg I think)

I think Mercedes makes their own automatic transmissions and so does VAG I think.

Quote:
Originally Posted by reprod View Post
Bad purchase... with electric on the rise, these types of transmissions will see lower and lower orders over time.
I'm sure ZF also invests in developping electric drivetrains, so the EV market certainly doesn't have to mean bad economical prognosis for ZF.
As long as cars have drivetrains, ZF has potential customers (apart from that ZF is a conglommerate, they also own Sachs, Boge etc etc)
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      04-12-2019, 11:36 AM   #15
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Quote:
Originally Posted by duky View Post
I wonder why BMW doesnt just buy ZF. I'm sure it has been considered! They seem to make really awesome transmissions but perhaps having that as an exclusive is not a differentiator enough with most customers to make the ROI make sense.
Trend of shifting to EV/Hybrid technologies, it made sense that bmw collaborate with toyota as they have extensive experience in automotive ev/hybrid technology and as for ZF, there are anti competition laws and also the huge capital required for buying ZF just doesnt make financial sense for bmw to acquire. Outsourcing seems to be the trend these days on cost cutting and reducing resource draining liabilities.
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      04-12-2019, 12:09 PM   #16
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Quote:
Originally Posted by GuidoK View Post
BMW is for sure a huge ZF customer regarding automatic transmissions. (manuals come from getrag, including dkg I think)

I think Mercedes makes their own automatic transmissions and so does VAG I think.


I'm sure ZF also invests in developping electric drivetrains, so the EV market certainly doesn't have to mean bad economical prognosis for ZF.
As long as cars have drivetrains, ZF has potential customers (apart from that ZF is a conglommerate, they also own Sachs, Boge etc etc)
VAG uses ZF as Audi is starting to use ZF8's on their larger cars as do Porsches in SUV's. The best automatic transmission in the world (PDK) is made by ZF in collaboration with Porsche.
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      04-12-2019, 12:13 PM   #17
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Quote:
Originally Posted by duky View Post
I wonder why BMW doesnt just buy ZF. I'm sure it has been considered! They seem to make really awesome transmissions but perhaps having that as an exclusive is not a differentiator enough with most customers to make the ROI make sense.
Strong anti Monopoly laws maybe?
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      04-12-2019, 12:16 PM   #18
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Quote:
Originally Posted by heavyD^2 View Post
VAG uses ZF as Audi is starting to use ZF8's on their larger cars as do Porsches in SUV's. The best automatic transmission in the world (PDK) is made by ZF in collaboration with Porsche.
Ok I didnt know that. But VAG also builds lots of their own transmissions afaik in multiple factories in spain, germany, china... (something that bmw completely doesnt).

But of course volkswagen has been using zf clutches since prehistoric times so although the gearbox may come from another manufacturer, there isnt a volkswagen anywhere that is free from ZF parts
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Last edited by GuidoK; 04-12-2019 at 12:22 PM..
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      04-12-2019, 12:21 PM   #19
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wonder what's ZF going to do when car switch to electric in big numbers (i.e. no transmission)
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      04-12-2019, 12:26 PM   #20
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That's interesting, they only have a 9% profit??? That seems very low!
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      04-12-2019, 12:27 PM   #21
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Quote:
Originally Posted by reprod View Post
Quote:
Originally Posted by duky View Post
I wonder why BMW doesnt just buy ZF. I'm sure it has been considered! They seem to make really awesome transmissions but perhaps having that as an exclusive is not a differentiator enough with most customers to make the ROI make sense.
Bad purchase... with electric on the rise, these types of transmissions will see lower and lower orders over time.
Not at all true.

While electric cars don't have transmissions, they are currently being developed to offer better range and efficiency.

ZF are known to be leading this development.
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      04-12-2019, 12:29 PM   #22
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For reference

https://www.zf.com/mobile/en/technol...s/domains.html
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