ZF’s search for an investor for its chassis systems division was revealed a year ago. The supplier and Foxconn are now creating a joint venture.
ZF Friedrichshafen is selling half of its axle business to Hon Hai Technology Group, also known as “Foxconn.” The two businesses will each own half of the joint venture producing passenger car chassis systems, according to the German supplier.
ZF Chassis Modules GmbH’s enterprise value is estimated by the supplier to be about $1.1 billion. The subsidiary employs 3,300 employees worldwide at 25 sites, with 100 of them working in Germany. In 2023, the business unit’s sales are projected to reach more than four billion euros.
The joint venture agreement is anticipated to go into force six to nine months after it is signed and following regulatory clearance. According to Holger Klein, CEO of ZF, the two businesses want to grow together, especially in growing markets. Young Liu, chairman and CEO of Foxconn, adds, “We are highly interested in exploring more collaboration potential with ZF in the transportation and mobility industries.
ZF Group is reduced in size by Holger Klein
“Manager Magazin” stated in January of last year that ZF was preparing a partial sale. Due to significant purchases, The Group from Lake Constance has accrued substantial debt. The corporation finds it challenging to settle these debts due to the significant costs associated with the change of its business models toward electromobility and greater software proficiency. CEO Holger Klein is currently working to make the ZF Group leaner in light of the rising borrowing rates.
The business will quickly sell its stock in the supplier of development services, among other things. It is anticipated that the sale to HCL Tech of India would generate about 90 million euros.
The road Foxconn took to get into the car industry
The main product that Foxconn produces is electrical equipment. However, the business has been attempting to break into the automotive sector for some time. In 2005, it acquired a provider of vehicle cables. Since that time, Foxconn has consistently maintained its position as a producer of e-car parts and e-cars.
Foxconn unveiled its own electric vehicle platform and quickly established a joint venture with Stellantis less than three years ago. The business has already created its own automobiles.