In our premiere episode of Beyond Cost, host Sasan Hashemi sits down with Andreas Hartmann, former board member at ZF Friedrichshafen AG, to trace the turning points that have reshaped global automotive. From the optimism of the early 2000s to the rise of Chinese OEMs, from megadeals like ZF’s TRW acquisition to the battle over car data, Andreas offers an insider’s view of where Germany stands, and whether it can still lead in 2045.
Meet Our Guest: Andreas Hartmann
Andreas Hartmann comes from Cologne and studied law, becoming a lawyer by education before moving into industry. He began his career in Maschinenbau at Klöckner-Humboldt-Deutz, then a publicly traded company, where he was responsible for strategy and M&A before becoming head of group financing.
In 1995, he joined ZF Friedrichshafen AG, one of the world’s largest automotive suppliers. At the time, ZF had around five billion in turnover; by the time Hartmann retired, that number had grown to nearly 40 billion.
Later, he also served as Of Counsel at GSK Stockmann, one of Germany’s major law firms, where he focused on M&A and automotive strategy.
The 2000s: Years of Optimism and Global Growth
We asked Andreas what the mood was like in German automotive at the start of the millennium.
Andreas: “At this time, there was still very much optimism. Everybody thought, oh, this is going up, up, up. Globalization was the big theme. We went to China, we went to India, we went to Mexico, to Eastern Europe. So, it was really booming. Nobody at this time thought that there would be such a disruption as we are seeing now.”
Sasan: “Interesting. So there was no fear of competition coming from Asia at that time?”
Andreas: “No, not at that time. I mean, of course, there was Japanese competition, but the German industry was still very much leading. Korean was coming, Hyundai and Kia, but they were not seen as such a strong competitor. And China was not on the radar at all.”
2010: Electrification and the Rise of China
Sasan: “So when did the shift come? When did people start realizing China would become a serious competitor?”
Andreas: “That was really around 2010. At this time, we already knew that electrification would endanger our transmission business. You don’t need a six-speed transmission anymore. Perhaps you need some form of transmission, but not as many gears, not as many parts. So we thought, what should we do? How can we compensate for decreasing in-house production volumes? That was the point when we realized China could be a strong competitor, because they could start directly with new technology without having to replace existing old technology.”
The Profitability Challenge for Suppliers
Sasan asked whether Germany’s strong domestic market should have been used to push EVs earlier.
Andreas: “The real issue for German automotive was always volume. Could suppliers get enough volumes from OEMs to make the industry financially viable? At that time, nobody was thinking about subsidies or state funds. It was more about whether the industry could develop in the right direction by itself.”
The constant dilemma: legacy products remained profitable, while new technologies weren’t yet. Suppliers faced the task of balancing both.
Global Sourcing and the Pressure to Compete
Sasan: “Isn’t it also a problem that OEMs increasingly want to source locally, especially in China?”
Andreas: “Even if they use European partners, they benchmark costs against the local market. If Chinese suppliers can provide cheaper, OEMs will push European suppliers to match — and if the gap is too big, they switch. The challenge today is that Germany is no longer the most competitive location, with high energy costs and heavy bureaucracy. That’s why you see layoffs at big OEMs and suppliers — not because they want to, but because they must, to stay competitive.”
Leading Transformation in Large Organizations
How do you drive transformation in a company with decades of history? Hartmann described the challenge:
Andreas: “Profitability still comes from old products, while the new ones are not as profitable yet. People working on the old products feel they are financing the ‘crazy ideas’ of the new ones. You have to change mindsets without losing the profitability of the old business. Communication is the key, but it’s difficult because people don’t always speak a common language.”
M&A Lessons from ZF’s TRW Acquisition
ZF’s acquisition of TRW was one of the largest supplier deals in history.
Andreas: “One plus one must be at least two, not 1.5 or less. That’s the key. But it’s not easy. Some people inevitably feel like losers because they are moved from positions they held for 20 years. You need to reorganize, but also keep people from resisting.”
Software, Data, and the Future of the Car
ZF had embedded software for decades, but consumer expectations evolved.
Andreas: “The difference today is that consumers think of software more like computer features — connectivity, apps, user interfaces. That’s where the demand is growing.”
On data ownership: “Cars generate huge amounts of data, which is very interesting for many companies. Who controls it will be decisive. My old car had physical controls for temperature and seat heating. My new one puts everything on a screen, which I find dangerous… For younger generations, it’s normal. But for me, it doesn’t feel natural."
Disruption Across the Value Chain
Hartmann emphasized that the scale of change today lies in its simultaneity.
Andreas: “The big thing is that everything is happening at the same time. Technology, regions, regulation — all in parallel. New players start from zero with new technologies. Established companies must balance old and new. That makes transformation harder.”
He compared it to other industries: “Some companies will survive, some will disappear — like in the camera industry. The Japanese dominated cameras, but then came smartphones. Some brands survived, others didn’t. The same will happen in automotive.”
Closing Thoughts
The first episode of Beyond Cost sets the stage for the series: Germany’s automotive industry stands at a crossroads. Disruption is global, fast, and unavoidable. The question, as Hartmann puts it, is not if change will come — but which companies will adapt quickly enough to still be leaders in 2045.
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