© ZF Friedrichshafen AG, 2014 1 2014-06-26

ZF Friedrichshafen AG

Member of the Board of Management

Michael Hankel

Innovation and Value Add within the CV-Industry

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Efficiency for Motion and Mobility

Global Megatrends

Society and

Environment

Politics,

Legislation,

Finance

Market and

Customer

Technology

and Product

A

B

C

D

E

F

G

Megatrends

Commercial Vehicles

Reduction of CO2 and Emissions

Total Cost of Ownership

Reliability / Availability

Connectivity

Regional Trends

Globalization

© ZF Friedrichshafen AG, 2014 3 2014-06-26

Volatile markets strengthen uncertainty

HCV > 6 t in 1,000 units

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

11/10: +7%

12/11: -10%

13/12: +/-0%

Year to year change of CV production in %

Western Europe North America

South America Asia

2013: Pre-Buy-Effekt

© ZF Friedrichshafen AG, 2014 4 2014-06-26

Abstract of trends

Driveline Passenger Cars

Downsizing

Variant Diversity

Electrification

E-Mobility

Connectivity / ADAS

Chassis Passenger Cars

Mega City Vehicles

Fully-Automated/

Autonomous Driving

Lightweight Design

Functional Integration

Commercial Vehicles

TCO

Robustness

Increase of Efficiency

Electrification (i.e. Bus)

HEV/BEV

Parallel Hybrids

Further (i.e. Construction)

Consumption Reduction

Telematics

Driver Assistance

Electrification

Semi-Autonomous Driving

Platform Strategies

Modular Design

Commoditization

Cost-Reduction

Localization

‘Best Market Fit’-

Technologies

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Volume bundling in platforms

or modular kits

Strong dependency on fewer

platforms

Big OEM reduce dependency

via dual sourcing concepts

Holistic acquisition strategy

necessary

Challenges Mega platforms – growing pressure on suppliers

© ZF Friedrichshafen AG, 2014 6 2014-06-26

All „classic“ domains will change rapidly within the next years!

Changes for the future CV

Flexible / scalable functional- & SW-architecture „The Rolling Robot“

Main challenge are shorter innovation cycles.

Modular concepts are of high necessity.

System

Architecture

Open Standards

Robustness Portability

Transparency Extension

Effective Code Scalability

PreVision GPS for the transmission system TraXon

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Challenge for OEM

Differentiation USPs

Economies of scale by

putting volumes from

different OEMs together

‘Economies of scales’ Konflikt

A product which offers

the possibility for differentiation

The OEM has to offer a

better truck than the competition.

…need for USPs Conflict

“Supplier's approach”

© ZF Friedrichshafen AG, 2014 8 2014-06-26

One transmission – five modules The new, modular TraXon transmission

For heavy CVs

Development objectives: Cost-effectiveness, Reduction of life-cycle costs (LCC)

Modular design: Single or twin plate clutch

Dual-clutch module

Hybrid module

Engine-dependent PTO

Torque converter clutch module

© ZF Friedrichshafen AG, 2014 9 2014-06-26

Design to Market

will be achieved via:

Usage of an existing local design together with an established brand name

Smart design solutions for components considering local supplier structure

No compromises in terms of process and quality standards

means:

Consider local vehicles prices

Go for 100 % local suppliers

Basic design with approved regional derivations

© ZF Friedrichshafen AG, 2014 10 2014-06-26

3.155

3.661

0

200

400

600

800

1.000

1.200

1.400

1.600

1.800

2.000

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

China

Western Europe North America

India

Scale

total

production

(column)

Scale regional production (lines)

Local for Local

Trend

© ZF Friedrichshafen AG, 2014 11 2014-06-26

Supplier Development

Global Sourcing

Supply Chain Management

Strategic Cost Management

Quality Management

Electronic Processes

Supplier Management

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The next CV-generation?

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