Dynamic Growth for ZF

Dynamic Growth for ZF

April 27, 2007

    - Sales in 2006 Increase by 8 Percent to EUR11.7
Billion
    - Stronger Competitive Position in All Market Segments
    - Innovative Products Increase Benefit to Customers and
Improve 
      Environmental Compatibility

    ZF Friedrichshafen AG continued to grow in 2006. Sales
increased by 8 percent to EUR11.659 billion. The average
number of ZF employees increased by 2 percent this year to
total 55,050. Net profit after taxes totaled EUR296
million.

    FRIEDRICHSHAFEN, Germany, and STUTTGART, Germany, April
27 /Xinhua-PRNewswire/ -- Speaking at the annual press
conference in Stuttgart, ZF Friedrichshafen AG CEO
Hans-Georg Harter reported that the ZF Group continued to
strengthen its international market position in 2006. ZF
divisions and business units gained substantially from
strong sales in the commercial vehicle and construction
machinery segments. The success of European vehicle
manufacturers on export markets had a positive impact on ZF
performance. According to Mr. Harter, "This enabled ZF
to take an important step to toward securing the
future."

    Technology Leadership Through Innovations

    Included among the most successful products for
passenger cars are the ZF 6-speed automatic transmissions.
The second generation of these products was launched on the
market in 2006. This advanced version of the
first-generation 6-speed automatics produced since 2001
features significantly shorter shift response times and a
further improvement in fuel economy. ZF produced more than
one million automatic transmissions for passenger cars in
last year. Other products on the company's list of top
sellers include electronic steering systems, of which ZF
produced 1.6million units in 2006. Last year's market
response was also very positive for ZF passenger car axle
transmissions (800,000 units), commercial vehicle
transmissions (400,000 units), complete axle systems (1.6
million units) and electronic damping systems (800,000
units).

    ZF products play a significant role in reducing
vehicle/fleet fuel consumption and emissions. The
second-generation 6-speed automatic transmissions for
passenger cars improves fuel economy by 3% with gasoline
engines and up to 6% with diesel power. The hybrid systems
currently being developed by ZF in cooperation with
Continental Automotive Systems reduce fuel consumption even
further. In the chassis area, electronic steering systems
and lightweight components make it possible to achieve
additional reductions in fuel consumption. 

    Regional Developments

    ZF development in the different regions around the
world was varied in 2006. Sales in Western Europe increased
by 4 percent to EUR7.841 billion. In Eastern Europe, the
company reported growth of around 70 percent with sales
totaling EUR547 million. The share of ZF Group sales in
Western and Eastern Europe was quoted at 72 percent. The
strongest growth was reported in the Asia-Pacific region
with a 48-percent increase in sales to EUR1.115 billion.
The is equivalent to a nearly 10-percent share of ZF Group
sales. The NAFTA region accounted for 14 percent of ZF
sales, a 9-percent decline compared to the previous year's
figures. 

    Along with optimizing processes and structures, the
future focus for ZF in North America is on increasing
engineering and sales activities. This applies to existing
ZF customers as well as to the transplants of Japanese and
South Korean manufacturers. In South America, where ZF
generated 3 percent of its totals sales, EUR369 million,
the company reported a positive growth rate of 4 percent.

    Germany, where the number of ZF employees remains at a
consistently high level, is a top priority for ZF. In 2006,
the average ZF Group workforce numbered 55,050 employees.
Around 60 percent of these people work in Germany. The
total number of ZF employees increased by around 2 percent
in 2006 compared to the previous year's figure. 

    Potential in the Emerging Markets

    A further increase in global activities is necessary
for ZF to maintain and expand its long-term position on
world markets. Along these lines, the product strategy will
focus more intensively on a design-to-market approach to
meet the different customer expectations in the various
regions. The rapidly growing demand for vehicles in the
emerging markets offer interesting potential in this
respect. ZF is striving for a balanced regional
distribution of sales between Europe, North America and
Asia. Europe will remain as the largest long-term market
region. In terms of customers and markets, higher growth
rates are expected in North America and especially Asia.
According to Mr. Harter, the rate of growth in ZF sales for
2007 will be somewhat lower compared to 2006.

    ZF is one of the world's leading automotive industry
suppliers specializing in driveline and chassis systems.
With around 55,000 employees, the company operates 120
plants in 25 countries. The ZF Group generated sales of
EUR11.7 billion in 2006. ZF ranks among the 15 largest
automotive suppliers worldwide.

    Photos and additional press releases are available on
the Internet: http://www.zf.com/presscenter


    Press contact:

     Matthias Lenz
     Corporate Public Relations
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     Martin Demel
     Business Press and PR
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