Annual balance: Crisis in the auto industry: ZF with loss of billions

The car supplier ZF wrote deep red figures in 2024. The loss was just over a billion euros, as the company in Friedrichshafen announced on Lake Constance. Above all, high provisions for conversion costs of around 600 million euros would have led to the net result. In 2023 the company had made a profit of 126 million euros.

“The year 2024 made it clear how enormous pressure our industry and thus our company is under,” said ZF CEO Holger Klein. You encounter the challenges with a measure plan. These include savings and job cuts. The goal is to inglate ZF and to develop into a more agile and profitable technology leader.

Burglary and loss of sales

ZF is one of the world’s largest automotive suppliers. The group belongs to 93.8 percent of the Zeppelin Foundation, which is led by the Mayor of the City of Friedrichshafen. Like many others in the industry, the company suffers from the weak economy and the poor demand – especially for electric cars. Despite the loss, a dividend of just over 40 million euros should go to the Lake Constance city.

The European auto industry and thus also the German manufacturers and their suppliers are under pressure. They see themselves exposed to increasing competition from China, but the US car maker Tesla also contests European companies in the e-car market shares.

This industry is of crucial importance for the economy in the EU and especially in Autoland Germany. After years of extreme yields, the car manufacturers are currently going down. Everyone reported a whopping decline in profits for 2024.

The ZF Group was able to achieve 41.4 billion euros last year. This is a decline of around eleven percent or 5.2 billion euros compared to the previous year. The adjusted operational result (EBIT) was around 1.5 billion euros, which is around 900 million euros less than 2023.

Debt burden corporations

In addition to the sluggish business and an enormous investment pressure, high debts of more than ten billion euros also put a strain on the group. These have their origin, especially in the acquisition of the car supplier TRW and the brake specialist Wabco. The group currently pays several hundreds of million euros in interest. The debt mountain rose by around 500 million euros in 2024 compared to the previous year.

The group hopes for relief by getting investors on board with individual divisions. The drive division, the heart of ZF with more than 30,000 employees, is currently being prepared for a possible partnership with a split. The group continues to exclude a sale, but this time with the epithet “first”. “A possible partner should win our heart and not tear it out,” emphasized Klein.

Number of employees drops

In the coming years, ZF plans to reduce up to 14,000 jobs in Germany. As of December 31, 2024, the group employed 161,631 people worldwide – around four percent less than in the previous year. In Germany, the number of employees nominally also decreased by a good four percent to just over 52,000.

An improvement is not to be expected for the current financial year. In the case of stable exchange rates, the group assumes sales of over 40 billion euros for 2025.

The group had to change as profound than ever before, emphasized Klein at an online press conference. 2024 and 2025 are years of transition.