Top Ten Global Supplier Absorbing Market ShareMon, 09/01/2014 - 11:11
Q: ZF Group is almost one century old. What role have emerging markets come to play in the group’s global strategy over that time?
A: ZF Group is going to celebrate its first century in 2015 and we have expanded steadily throughout our history. ZF is a global leader in driveline and chassis technology with 122 production companies in 26 countries. As the eighthlargest supplier of OEMs worldwide, in 2013, the Group achieved sales of about €16.8 billion with approximately 72,600 employees. In order to continue to be successful with innovative products, ZF annually invests about 5% of its sales in R&D. This amount reached €836 million in 2013. Our global expansion strategy has been successfully implemented worldwide, largely because we chose partners who already had a strong global presence. ZF Group came to Mexico at the end of the 1990s after making two acquisitions, a clutch company named Borg & Beck and Aralmex that produces shock absorbers. Over the past decade, we introduced the manufacturing of transmission, steering, and suspension parts here in order to expand our local product portfolio. Originally every single Mexican company was independent, working on its own with its aftersales partners. But the group decided that all aftermarket products should be handled by one company, leading to ZF Services entering Mexico in 2007.
Q: What are your main priorities in the Mexican market?
A: ZF Group in Mexico has been focused on delivering real customer satisfaction for its regional OEM customers such as Mercedes-Benz, BMW, Volkswagen, Volvo, Nissan, GM, and Ford. This has been achieved in two ways. We introduced high technology and quality at competitive cost levels and lead times across our different components and service concepts, and we introduced new product lines to offer a one-stop shop strategy for aftermarket customers. ZF Group implements this strategy globally and Mexico is no exception. In Mexico, ZF Services has a market share of over 50% for its shock absorber line under the BOGE brand and has the second-largest brand for clutches. We are now introducing a line of steering and suspension parts under the Lemförder brand, as well as continuously variable transmission (CVT) components for repairing and remanufacturing under the ZF Parts brand.
Q: How does ZF Services actively communicate its commitment to superior quality?
A: Superior quality means combining superior design and functionality at a reasonable cost for our customers. This is combined with a proven service capability and the capacity to timely attend to the needs of any OE customer or end user. This is essential as our OE customers and end users are demanding high technology products with a reliable service readiness. We rely on ZF’s own divisions as our main suppliers to ensure a standard level of OE quality, as they are supplied by a supplier base developed for the European markets and backed up local presences. Local and regional suppliers become subject to evaluations under the same quality standards and values.
Q: How is your Mexican logistical strategy evolving as the market develops?
A: Market needs are constantly changing. With the latest developments in areas such as IT, our responses to customers need to be optimized. We are adapting our logistics strategy to properly serve our current distribution network as well as new retail chains, such as AutoZone, NAPA, and O’Reilly, which are growing faster than other distribution channels. E-tailing is another example of new channels rising up with different requirements that also need to be covered. The world is becoming smaller in terms of distribution, so our export sales must be accompanied by a new logistics strategy to deliver customers’ orders overseas faster. This can be done by incorporating supply chain management techniques such as drop shipping.
Q: What expansion plans do you have in Mexico?
A: All of ZF’s Mexican plants are growing due to the new OEM plants coming into the central part of the country. Our shock absorber plant ended 2013 with a record sales volume of 16.7 million units. It is on target to deliver 20 million units in 2015 and 30 million in 2025 based on the OEM orders we have been awarded. Our aftermarket sector is growing based on brand positioning and the introduction of new product lines, such as steering and suspension parts for passenger cars and commercial vehicles, and transmission parts for agricultural and offroad vehicles.