ZF Expands Transmission Output, Attracts New Customers – Toyota Next?
The German transmission maker ZF Friedrichshafen AG has decided to invest $215 million in the U.S. to expand production of its 8- and 9- speed transmissions. Could Toyota join the growing number of automakers using their transmissions?
ZF made the announcement that they would invest in their South Carolina plant that just opened in June. Apparently, the popularity of its transmissions has grown so fast, so quickly, they are already expanding to keep up.
Remember that the ZF 8-speed transmission is the new one powering the Ram 1500. It is part of the reason for increased fuel economy in that pickup and (for Ram fans) a reason to hope the transmission problems of old are over with.
ZF’s U.S. sales have tripled since 2008 to $2.3 billion in 2012, a company official told AutoNews.com.
“Even before starting production, we have so much demand for the nine-speed that we decided on a further expansion of almost 50 percent, another 400,000 nine speeds,” ZF Chief Executive Officer Stefan Sommer told MLive during an interview Thursday in South Carolina. “This shows what big growth opportunities we have, and the opportunities with this product.”
ZF’s 9-speed transmission up close:
The plant currently is expected to produce 1.2 million transmission annually with 400,000 8-speed and 800,000 9-speed when construction is completed in 2016.
Chrysler, Audi, BMW, Jaguar and Land Rover are the customers that use the 8-speed. ZF says they have more customers shopping them, but has so far declined to name who they are.
Their 9-speed transmission is said to be the “world’s first” and will be used in the new Jeep Cherokee and Land Rover Evoque.
These new 8- and 9-speed transmissions are currently the talk of the industry when it comes to meeting the 2016 CAFE regulations. Ford and GM have both announced plans to develop them for themselves. GM is using an 8-speed transmission in the 2014 Cadillac CTS sport sedan from Aisin AW Co. (a Japanese supplier).
Having a transmission maker expanding operations in the U.S. means less import costs to manufactures and could be a simply solution to improving fuel economy with less R&D costs. Could Toyota be next to sign up for the new transmission? Who knows really with the tight-lipped Toyota executives and their standard line “we cannot comment on future power train developments.”
It makes some sense though. Toyota could easily develop a new licensing agreement like Chrysler did and bring the new technology in house – quickly. For the bean counters at Toyota, this would be a less expensive way to buy known technology without spending the time and effort to develop their own.
The real knock to this approach, is that if the transmission is found to have quality concerns, those concerns are reflected on the brand and not the supplier. For example, Toyota’s issues with air injection pumps, blown steering racks, cam shaft leaks, etc… are blamed on Toyota NOT the third-party supplier where it should be. Using third-party suppliers is a BIG risk for automakers yet the savings can be quite significant.
What do you think? Should Toyota outsource the transmission or spend the time developing their own?
Filed Under: Auto News