ZF Friedrichshafen AG (ZF Group), one of the world’s largest automotive suppliers, and Hon Hai Technology Group (Foxconn) (TWSE:2317), the world’s largest electronics manufacturer, announced a 50-50 partnership in passenger car chassis systems, a key move aimed at accelerating and expanding automotive and supply chain opportunities with top-tier customers.

In 1994, ZF launched production-synchronized supply of complete front axle systems for the BMW Z3 Roadster at its assembly location in Duncan, South Carolina. Today, ZF delivers individually tuned front and rear axles to automotive manufacturers throughout the world. Photo: ZF

Foxconn will acquire a 50% stake in ZF Chassis Modules GmbH, a unit of ZF Group which bundles the passenger car axle systems assembly and has an enterprise value of approximately €1 billion (approximately US$1.1 billion), enabling a strategic partnership that will further grow opportunities for ZF Chassis and widen new perspectives for Foxconn in the automotive sector.

The partnership will leverage each other’s capabilities and expand the range of product offerings in the internal combustion engine and especially electric vehicle (ICE/EV) space.

With Foxconn, we have gained a strong strategic partner with whom we can open up new perspectives and opportunities for the ZF Chassis Modules GmbH. ZF as a globally active automotive supplier and Foxconn as a leading electronics manufacturer complement each other excellently to jointly open new customer groups and expand its presence, especially in growing markets. With this step, we are implementing our strategy to grow specific business areas of ZF with the support of external partners beyond current limits.

—ZF CEO Dr Holger Klein

ZF and Foxconn expect the JV agreement to be effective within six to nine months after signing and following regulatory approvals.

ZF Chassis Modules GmbH, serving global premium and volume car manufacturers, is represented at 25 locations worldwide. It has approximately 3,300 employees, of which 100 are in Germany. The business unit’s sales are expected to exceed €4 billion (US$4.5 billion) in 2023.