ZF Revenue Increases 7 Percent in 2006

Growth Fueled by Stable Commercial Vehicle Market; High Demand for Innovative Products; Improved International Market Position

FRIEDRICHSHAFEN, Germany, Dec. 14 -- ZF announced today that its revenue increased by seven percent in 2006 to $15.37 (euro 11.64) billion. The company is benefiting primarily from innovative products for passenger cars and commercial vehicles.

"ZF is right on course for the future," said departing ZF CEO Siegfried Goll at the company's year-end press conference today in Stuttgart, Germany. Goll will retire at the end of the year, handing over leadership of the company to his successor, Hans-Georg Harter.

Goll's last year with ZF is one of the most successful in company history.

The demand for innovative products continued to grow. This year, ZF manufactured approx. 970,000 6-speed automatic transmissions, while overall automatic transmission production exceeded one million units.

The ZF Driveline Technology Division produced 1.8 million dual mass flywheels and other components. The Car Chassis Technology Division manufactured over 1.6 million passenger car and light truck axle systems worldwide in 2006. Production of electronic CDC (Continuous Damping Control) suspension systems reached 845,000 units. Production of electric power steering systems for passenger cars totaled 1.6 million units. Annual production of the AS Tronic automatic transmissions for commercial vehicles reached 56,500 units, up 18 percent from 2005. The company also reported significant growth in bus axle system sales, as well as construction machinery production.

ZF further improved its international market position in 2006. Production was launched at a chassis component plant in Newton, North Carolina. While, in China, the new ZF Drivetech (Hangzhou) subsidiary was established and is currently manufacturing heavy-duty truck transmissions. Since mid-2006, ZF Transmissions Shanghai has been producing automatic car transmissions for the Chinese market. ZF Marine established a joint venture for the assembly and sale of heavy-duty transmissions for commercial ships in Nanjing. ZF Lenksysteme started producing steering systems this year at its plant in Jinan. The number of ZF production sites in China now totals 18. ZF is also expanding the capacity of the engineering center in Shanghai where the number of employees will increase from 22 to 70 by 2010.

In Adelaide, Australia a new axle assembly plant launched series production for GM Holden.

Overall, the company's workforce increased only slightly (1 percent) over 2005, to 55,400.

Division sales

Preliminary annual sales figures for the ZF divisions in 2006 are as follows. ZF Car Driveline Technology Division sales increased in 2006 by 3 percent to $2.1 (euro 1.98) billion. The Car Chassis Technology Division reported a 10-percent rise in sales to $3.0 (euro 2.3) billion. Commercial Vehicle and Special Driveline Technology ended the year with a sales increase of 7 percent to $2.35 (euro 1.78) billion. Meanwhile, sales at Off-Road Driveline Technology and Axle Systems rose by 18 percent to $2.21 (euro 1.68) billion. Powertrain and Suspension Components reported sales of $2.77 (euro 2.1) billion (up 2 percent). ZF Lenksysteme achieved a sales increase of 5 percent to $1.55 (euro 1.17) billion.

  The official 2006 sales figures will be announced in April 2007.

  Outlook 2007

The prospects for the coming year differ significantly from region to region. Declining sales are anticipated in the North American market, especially in the heavy commercial vehicle segment. By contrast, substantial increases are forecast for the Asian-Pacific region. This growth will be fueled primarily by markets in China and India. Driven by high consumer demand on individual markets and production outsourcing by vehicle manufacturers, extremely positive developments are expected for the Eastern European market. ZF forecasts moderate growth in Western Europe for the coming year.

ZF 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 employs approximately 54,000 at 122 locations in 26 countries, and totaled sales of $13.5 billion in 2005.

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