ZF Friedrichshafen AG and its joint-venture partner Guangxi LiuGong Machinery Co., Ltd. plan to establish a new joint-venture company in China, to develop and produce axles for heavy construction vehicles. The timetable calls for the new ZF Liuzhou Axle Co. Ltd.to be producing 3,300 units/year by 2014. In its announcement ZF indicated the venture strategy would extend a product development program that has been underway for nearly a year.
The capitalization plan for ZF Liuzhou Axle was not announced.
ZF Group is a global designer and manufacturer of automotive component systems, in particular driveline and chassis products. It operates several subsidiaries in North America’s automotive sector. Among its current joint ventures is one with Chinese construction equipment company Guangxi LiuGong Machinery Co. Ltd.
Since 1995, ZF and LiuGong have been operating Liuzhou ZF Machinery Co. in Liuzhou, China. It produces construction machinery transmissions and axles, and has about 300 employees. The new venture will operate in Liuzhou, too, and will produce wheel-loader axles that are customized for China’s domestic market. Plans call for it to employ approximately 190 and produce over 30,000 axles annually. These will be supplied to the joint venture in LiuGong and to other manufacturers in China.
ZF emphasized the new axle product line will be technically reliable and affordable.
The new axle designs are already in development, ZF indicated. “A team of engineers from ZF headquarters, LiuGong, and ZF China have been working together to upgrade the existing axle models for LiuGong wheel loaders since October 2011,” according to Hermann Beck, head of ZF’s Off-Highway Systems business unit. “These joint efforts brought about a modular axle concept that, besides the standard version with dry disk brake (Basic Line), offers the possibility to supply a new, even more sophisticated technical solution with wet multi-disk brake (High Line) using a large portion of common parts.”
The new modular concept will have lower production costs, ZF reported. An estimated 3,300 newly designed axles are set to be produced at Liuzhou by 2014. The annual volume will increase to more than 30,000 by 2018. Approximately 190 employees will be working in the new company by that time.
“Together with our partner LiuGong, we have developed a product which exactly matches the requirements of the Chinese market,” Rehm continued.
ZF CEO Stefan Sommer predicted the new joint venture would strengthen ZF’s activities in China. “During the past years, the country has experienced a rapid development of construction machinery,” he explained. “More than half of the worldwide wheel loaders are produced in China. A considerable amount of machines are also being exported … The impressive export rate, in particular, represents a big challenge since it frequently leads to market fluctuations,” he said.
LiuGong chairman Wang Xiao Hua, stated: “The new venture will benefit from the many successful years of cooperation already between LiuGong and ZF and by further extending this beneficial cooperation, we will continue to set many things in motion on the fiercely competitive construction machinery market.”