ZF Sales Increase 7 Percent Worldwide in 2005

New Products, Along With an Upswing in the Heavy Truck and Construction Markets, Pay Dividends

NORTHVILLE, Mich., Dec. 15 -- Automotive supplier ZF Friedrichshafen AG announced it achieved a worldwide sales increase of 7 percent during 2005 to $12.8 billion (euro 10.7 billion). The increase was attributed to new developments in driveline and chassis technology, and an upswing in the commercial vehicle and construction machinery markets.

ZF CEO, Dr. Siegfried Goll, speaking at a press conference in Stuttgart, Germany today said, "ZF outperformed the market again this year. We managed to strengthen our international position, particularly in our core business segments of driveline and chassis technology for passenger cars and commercial vehicles."

Several key innovations played a major role in the company's success in 2005. More than 885,000 six-speed automatic transmissions were sold to vehicle manufacturers, along with 1.35 million units of a new electronic steering system for the Volkswagen Golf and Passat, and more than 1.2 million axle systems were produced for passenger cars.

During the IAA show in Frankfurt during Sept. 2005, ZF demonstrated the advantages of electronically controlled driveline and chassis systems in a concept car developed with Karmann. ZF also announced its strategic partnership with Continental Teves, to produce a comprehensive range of hybrid driveline and chassis products. ZF also offered a preview of its new 7-speed dual-clutch transmission, currently being engineered for sports cars.

ZF continued to move forward with its internationalization strategy this year by opening four companies in China, and launching new operations in Australia, Russia and the U.S. Holding companies in North America, South America, and the Asia-Pacific region are redefining the company's market presence. The ZF technical Center in Detroit was expanded and now includes ZF Sachs engineering operations, while a new technical center is currently under construction in Shanghai, China.

  Some key divisional figures:
  *  Car Driveline Technology division - up 9 percent
  *  Car Chassis Technology division - up 14 percent
  *  Commercial Vehicle and Special Driveline Technology division - up 9
     percent
  *  Off-Road Driveline Technology and Axle Systems division - up 11 percent
  *  Powertrain and Suspension Components division - no change
  *  ZF Lenksysteme (steering) - up 8 percent

  2006 Outlook

For 2006, ZF anticipates only moderate growth based on the development forecasts for North America and Europe. ZF expects worldwide production in the passenger car and light commercial vehicle market to increase moderately by around 2 percent. The growth will primarily be seen in China, India and Korea. Within the commercial vehicles segment, ZF expects the market to stabilize at its current level.

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 54,500 at 125 locations in 26 countries, and combined revenues for the group totaled more than $12 billion in 2004.

ZF operates a large manufacturing network in North America, combined with global research and development capabilities, to provide advanced technology to the region. The ZF Group North American Operations Headquarters and Technical Center is located in Northville, Mich., USA.