While the upcoming increases in the U.S. Corporate Average Fuel Economy mandate may be causing many a sleepless night for automotive planners, the fast-rising mileage targets are good news for German supplier ZF.
That’s because the parts maker expects to generate a wave of new business for its new fuel-saving 9-speed transmission which, it claims, can yield as much as a 16 percent improvement in mileage “in some driving conditions.”
The race to reach a CAFE average 54.5 mpg by 2025 has automakers looking at all sorts of options, and ZF expects that to help drive a steady surge in its business in the coming years, not only in its primary transmission line but also for its suspension and electric motor operations.
Some of the biggest growth is anticipated in North America, explained Stefan Sommer, the ZF Friedrichshafen AG CEO, during a news conference at the North American International Auto Show.
While Europe is still its biggest market — at about $13 billion in revenues last year, North America is second on the last, at $4.2 billion. The U.S., in particular, generated $3.8 billion in sales last year, and Sommer forecast that will jump to $5.6 billion in 2016.
The new 9-speed automatic transmission is a primary reason. It has already appeared in the Range Rover Evoq and, more recently, in Chrysler’s new Jeep Cherokee. A third automotive customer is expected to be announced during the current quarter, ZF officials hint, though they won’t provide any details.
The transmission hasn’t been without trouble. It was cited by Chrysler as a key reason why the launch of the new Cherokee was delayed several months late last year. But it appears to be working well now, and Sommer said he did not expect the delay to cause other potential customers to shy away from the fuel-saving design.
The 9-speed and an older 8-speed gearbox are both being produced at a huge plant in Gray Court, S.C. But Chrysler is producing 9-speeds at its own Kokomo, Ind., plant under license.
While transmissions account for roughly 56 percent of ZF business, the parts maker is looking to rapidly grow several other business lines, including electronic controls and, in particular, chassis components and motors.
It is already providing motors to German carmakers BMW, Audi and Mercedes-Benz for use in gas-electric vehicles, such as the Mercedes S-Class Hybrid. ZF is hoping to also start selling motors and more complete drivetrain packages for pure battery-electric vehicles, noted Sommer.
While battery car sales have been ramping up more slowly than proponents expected, demand is nonetheless on the rise, plug-based vehicles just falling short of the 100,000 mark in the U.S. last year. With many analysts forecasting more rapid growth due to the pressures of the 2025 CAFE mandate, ZF officials may have reason to rest at night.