ZF: Car Market Expected to Fuel Growth; Strong Euro and Weak Economy Holding Back Sales Growth

FRANKFURT, Germany, Sept. 15 -- Given the continuing worldwide economic slump, ZF Friedrichshafen AG is satisfied with the results that have been achieved in 2003. However, the ongoing drop in demand in many consumer areas along with the strong euro will prevent any significant increase in sales this year. At best, ZF expects that sales will only be slightly higher than the previous year which totalled euro 9.2 billion.

According to the CEO of ZF, Dr. Siegfried Goll, "Given the overall economic situation, the increase in our international volume of business has been promising. Unfortunately, this has not resulted in a significant rise in sales, primarily due to fluctuating exchange rates."

Growth this year was fuelled primarily by sales of steering technology and car driveline and chassis components. Despite the ongoing high demand for products from the Car Chassis Technology division, the weak US dollar -- and above all the high share of chassis system sales in North America -- has held back sales growth.

No major improvements are expected for the remainder of 2003. But ZF is optimistic about the coming year. The company predicts a worldwide recovery in 2004 for the production of cars (+ 2 percent) and light commercial vehicles (+ 4 percent).

ZF Friedrichshafen AG is a leading worldwide supplier of driveline and chassis technology. Headquartered in Friedrichshafen, Germany, ZF is among the 15 largest automotive suppliers in the world. The company has a total workforce of 53,300 at 119 locations in 25 countries, and combined revenues for the group totaled more than $10 billion in 2002.

With sales of more than $2 billion in 2002 ZF expects NAFTA region annual sales of more than $3 billion by 2004. ZF Group North American Operations are headquartered in Florence, Kentucky.