Known for Transmissions, ZF Aims for Autonomous Future

January 08, 2018 by Ryan ZumMallen, @Zoomy575M

ZF Friedrichshafen, an automotive supplier known for building quick-shifting transmissions, is making a big play into connected vehicles.

The company held demonstrations of its progress in autonomous valet parking and connected car payment technology and touted a partnership with Microsoft ahead of the Consumer Electronics Show in Las Vegas.

“We are moving more and more to the autonomous revolution,” said Mamatha Chamarthi, chief digital officer at ZF.

The supplier has formed alliances with companies such as technology leader Nvidia and Chinese artificial intelligence developer Baidu to create its Vision Zero Ecosystem. Its stated goal is a world with zero emissions and zero fatal accidents.

The partnerships will allow ZF to develop advanced powertrain, steering, interior and safety systems for both passenger and commercial vehicles.

ZF is known for building automotive components such as brakes, axles, suspensions and transmissions. Nearly all of the company’s revenue comes from supplying those parts to traditional automakers.

But the future presents new opportunities, Chamarthi said.

“We intend to actively shape the future of the automotive industry,” she said.

Aggressive Approach

Since 2015, ZF has acquired safety systems supplier TRW and purchased stakes in radar companies Astyx Communication & Sensors GmbH, Ibeo Automotive Systems GmbH and doubleSlash Net-Business GmbH. In addition to Nvidia and Baidu, ZF has formed partnerships with electronics supplier Hella KGaA Hueck & Co. and interior technology specialist Faurecia SA.

The company will offer its suite of technologies to customers on the Microsoft Azure cloud computing platform.

The strategy pits ZF against stiff competition. Several rival suppliers are developing advanced and autonomous technology in tandem with traditional automakers: Bosch has a partnership with Mercedes-Benz; Autoliv works with Volvo; and Denso works with Toyota.

ZF doesn’t have a comparable arrangement, leaving the company without an automaker to showcase its technology.

The aggressive approach has led to hiccups. ZF Chief Executive Stefan Sommer resigned in December following a failed bid to purchase Wabco Holdings Inc., a large supplier of truck and commercial vehicle technology and components. The company appointed an interim chief executive and is currently hunting for a permanent replacement.

However its partnerships are already bearing fruit.

At Baidu offices in Sunnyvale, Calif., recently, the company offered rides in a self-driving car. The vehicle uses ZF’s ProAI control unit mounted in the trunk to operate its cameras and sensors.

After pulling up to the front door of the Baidu office on its own, the car conducted a low-speed loop around the building. It made turns and stopped for a makeshift traffic light. At the press of a button, the vehicle can locate a parking space and park itself, or pick up passengers on command.

The system is already in use at ride-sharing depots in China. But Baidu and ZF said they have no plans to implement the technology in the U.S.

ZF also showed its Car eWallet system on a Volkswagen e-Golf at CES. Car eWallet uses the ProAI control unit as well, allowing the driver to wirelessly pay for services such as road tolls, parking spaces, ride-sharing and electric vehicle charging.

The project is a partnership with IBM and UBS. IBM provides Car eWallet with access to secure blockchain networks. UBS processes each payment.

ZF demonstrated Car eWallet in Las Vegas on a small mock cityscape. The system uses GPS to recognize when it has reached a connected charging or parking station. It asks the driver to authorize payment via a mobile app. Car eWallet could be used in either passenger or commercial vehicles.

The company expects Car eWallet to enter the market in Germany late this year.

Silicon Valley Credentials

ZF is not well known outside of the automotive industry. In its 102-year history, ZF has never built a car of its own. It is owned by a unique partnership with the local government in Friedrichshafen, Germany, and is not publicly traded.

But the company has nearly 138,000 employees in 40 countries, a spokesman said. It had $42.4 billion in sales in 2016 and has established networks in Israel, India and China to tap into the tech scenes there.

Its relationship with Microsoft and Silicon Valley firms is another effort to shore up its technological chops.

Microsoft has similar partnerships with traditional automakers. Companies such as Daimler, BMW, Toyota and Renault-Nissan all use its Azure platform.

But ZF’s experience building specific vehicle functions offers something different, said Sanjay Ravi, managing director for discrete manufacturing at Microsoft.

“We’re looking for people who are leaders and who bring a lot of domain expertise in their space,” Ravi said, adding that ZF is in a good position to shape the future of connected vehicles.

“ZF is now a digital company,” he said. “Our role is to be the technology partner to help them in their journey.”

Read next: Navistar CEO to Tesla —We’ll Have More Electric Trucks Than You

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