German auto parts supplier ZF expects the global auto industry to remain volatile in the second half of 2020, but the company said Asian countries, especially China, are offering some reassurance.
ZF CEO Wolf-Henning Scheider said: "China and (other parts of) Asia are currently the most promising markets. Business in this region is coming back very strongly and is helping us to increase our sales again."
Scheider made the remarks when ZF released its first-half financial statement on Friday. Due to the global economic situation and the coronavirus pandemic, the company's sales in the first six months totaled 13.5 billion euros ($15.91 billion), down 27 percent from the same period in 2019.
He expects markets in other parts of the world to remain tense. "Although Europe is showing signs of recovery at the moment, it will likely be the most critical region in the next few years due to declining vehicle exports and stricter emissions regulations," said Scheider.
Development in the Americas is also uncertain due to the high number of COVID-19 infections. Overall, ZF does not expect the global market to recover to 2019 levels in the next three years.
In view of the slow recovery, ZF is taking action to adapt to the new circumstances and achieve a sustained improvement in earnings.
Scheider said: "This is crucial to continue investing in future technologies such as e-mobility and autonomous driving, to win business and to further strengthen our financial independence for the future."
The company has announced that it will not invest in transmissions exclusively designed for internal combustion engine vehicles. Instead, it will focus its development work on flexible platform technologies for long-range plug-in hybrids and pure electric vehicles.
ZF is merging its powertrain and e-mobility divisions to better offer electrified solutions. The new division will be established on Jan 1, 2021.
Scheider said: "The corona pandemic is noticeably accelerating the transformation of the automotive industry. We expect electrification to come even faster now."
"The newly formed division will be able to leverage the system advantages of both divisions and offer vehicle manufacturers a comprehensive electrified portfolio as well as worldwide development and production capacities under one roof," he said.