The new electric car made by German auto parts maker ZF Friedrichshafen can be parked using a smartwatch and nimbler than Daimler’s tiny Smart car.
“It feels like the car is turning on its back axle,” said ZF Chief Executive Stefan Sommer after demonstrating the prototype near Berlin recently.
In fact, the “smart urban vehicle” has a turning radius of just 6.5 meters (ca. 21 feet). But rather than taking on Daimler, ZF wants to throw down the gauntlet to its German auto parts rivals, Bosch and Continental.
The e-car’s motors and powertrain come from the U.S. firm TRW, which ZF bought this year for €12.5 billion, or $13.8 billion, to become the world’s third-largest auto parts maker.
Now, just six weeks after that purchase, ZF is demonstrating some of the technology it will use to close the gap with the industry's leaders.
Overcapacity problems at the ZF headquarters in the southern German city of Friedrichshafen are another issue.
Mr. Sommer's growth targets for the ZF are ambitious.
For ZF, he wants to push turnover by 2025 to €40 billion annually.
When asked if that figure would top €70 billion if TRW’s business was included, Mr. Sommer said: “Exactly, that’s the dimension we’re expecting.”
But he added that that estimate was based on cautious industry forecasts, meaning the actual sales target could be higher.
The company based in southern Germany has annual sales of about €32 billion, with €13.2 billion coming from TRW.
With Continental's sales at €34 billion and Bosch notching up €33 billion, the industry leaders will have to double their sales to remain on top.
ZF alone will make €20 billion in sales in 2015, said Mr. Sommer.
He estimated TRW turnover next year at €16 billion to €17 billion – putting joint sales at more than €37 billion in 2016.
The company’s profit margin is forecast “at five plus some,” which would mean ZF is under its target of 6 percent. “We are getting closer to the competition,” he said.
The demonstration of the e-car outside Berlin showed not only ZF’s ambitions, but also its rapid advances in the technology race.
By buying TRW, the German transmission and chassis specialist gained access to driving assistance systems that will be crucial in self-driving cars.
“We will bring new solutions to the market. After all, we’re surrounded by opportunities,” said TRW's marketing boss Peter Lake, who is the only person from the U.S. firm to also have a position in ZF’s senior management.
But Mr. Sommer tried to laugh off problems plaguing his business, such as being forced to overhaul a nine-gear automatic transmission for the U.S. market.
“We’ve learned that the Americans drive differently than the Europeans,” he said.
Overcapacity problems at ZF headquarters in Friedrichshafen are another issue, after truckmaker MAN cancelled transmissions orders for its 40-ton trucks.
New customers and products are supposed to help offset that loss, but Mr. Sommer admitted ZF’s most expensive factory in the world needed to cut costs.
“Negotiations with the works council are continuing. I remain confident,” he said.
But he refused to comment on corruption allegations surrounding the chairman of ZF’s works council, who allegedly made the company improperly pay for bills of his trade union, IG Metall.
The accusations will head to court soon enough. The first hearings are scheduled for July 28.
Video: Driving ZF's electric car prototype.