Automotive Aftermarket division
- Automotive Aftermarket set up as third stand-alone division
- Cornerstone laying ceremony for the integrated European assembly and packaging center “AKO”: more flexibility, speed, and delivery performance to customers
- Close to approx. 2,200 customers via over 70 sales offices and branches worldwide
Customers and products
The Automotive Aftermarket division is responsible for the Schaeffler Group’s global business with spare vehicle parts. Customers include almost all major international and national trading companies which in turn supply the Schaeffler Group’s products to other distribution levels all the way down to the repair shop. The Automotive Aftermarket division is largely supplied from the Automotive OEM division’s manufacturing locations. In addition, the Automotive Aftermarket division successfully cooperates with all relevant trade cooperatives around the world in which a large number of its customers are organized.
The management model of the Automotive Aftermarket division follows a regional approach based on the regions Europe, Americas, Greater China, and Asia/Pacific. Within each region, products and services are sold via two distribution channels: the Original Equipment Service (OES) and the open (independent) spare parts market, known as the Independent Aftermarket (IAM). The OES comprises the automobile manufacturers’ spare parts business, that is, supplying original spare parts to branded repair shops, i.e. those that are authorized by automobile manufacturers. IAM, on the other hand, supplies independent repair shops that are not tied to any one vehicle brand with repair solutions and services via the various trade levels. IAM differentiates between two types of business. In addition to the traditional component business consisting of replacing parts, the Automotive Aftermarket division develops and distributes repair sets and kits custom-assembled to help make vehicle repairs simple, efficient, and professional.
Like the Automotive OEM and Industrial divisions, the Automotive Aftermarket division operates under the Schaeffler corporate brand but distributes its products under the three product brands LuK, INA, and FAG. It provides innovative repair solutions in original-equipment quality for clutch and clutch release systems as well as engine, transmission, and chassis applications. All components are optimally tuned to work together and allow for fast and professional replacement. In addition, the service brand REPXPERT focuses especially on comprehensive services for repair shops.
Whether for clutches, vibration damping, or transmission components – being a specialist for the drive train, the Automotive Aftermarket division offers intelligent repair solutions to the spare parts market under the LuK brand. Thanks to comprehensive systems expertise, these solutions enable repair shops to perform maintenance efficiently.
The repair solutions Schaeffler offers under the INA brand represent a spectrum of products for the key engine systems that is unprecedented in width. Whether for the valve train, timing drive, front end auxiliary drive, or cooling system – INA products are based on the expertise gained from the development and volume production of original equipment.
The FAG brand products make the Automotive Aftermarket division the specialist for chassis technology in the spare parts market for every aspect of the wheel drive, axle and wheel suspension, stabilizers, steering systems, and engine and transmission mounts. Top material and manufacturing quality ensure well-thought out repair solutions that are tailored to exactly suit repair shop needs.
Increasingly complex vehicle applications and the large number of new vehicle models are constantly confronting repair shop staff with challenging repair situations. The Automotive Aftermarket division’s REPXPERT offers numerous services covering every aspect of its products and repair solutions. By utilizing service hotlines, training seminars as well as installation guides or videos, and tools tailor-made for professional repairs – repair shops benefit from the Schaeffler Group's over 40 years of experience in the Automotive Aftermarket.
The spare parts business benefits from the vehicle population growing each year as well as from the rising average age and growing complexity of vehicles. In its forecast, research institution IHS Markit expects the worldwide population of passenger cars and light commercial vehicles to grow from approximately 1.4 billion in 2018 to approximately 1.6 billion in 2023 and the average vehicle age to increase from approximately 9.7 years to approximately 10.0 years. As the most significant increase for both parameters is expected in China, the division considers the Greater China region to hold the highest potential for growth.
The Automotive Aftermarket division considers itself very well positioned within the market. At the same time, it is preparing for future challenges, especially those arising from the move toward new drive technologies. Networking with the Automotive OEM division within the Schaeffler Group is key to this preparation.
Key growth drivers
In the years ahead, the Automotive Aftermarket division’s significant growth drivers include globalization, expanding the portfolio, and cross-selling. Digitalization and the continual increase in operational excellence represent a strong foundation for securing opportunities for growth.
Continuing to increase operational excellence includes increasing the speed and reliability of the division’s deliveries to customers around the world in order to further raise the level of customer satisfaction and loyalty. To this end, the Automotive Aftermarket division is investing extensively in expanding its logistics infrastructure. The creation of highly automated logistics locations whose capacity can be adjusted flexibly is aimed at further improving processes and securing continued revenue growth. The focus here is on efficiently supplying customers with intelligent repair solutions. Construction of the European Aftermarket Kitting Operation (AKO) in Halle (Saale) is currently under way, with capital expenditures totaling approximately EUR 180 m. The AKO will commence operations in the first half of 2020.
Digitalization, too, is moving to the center of attention when it comes to securing opportunities for growth. The emphasis here is on efficiencies gained from improving internal processes, advancing and improving existing business models, as well as developing new ones in order to meet current and future customer needs. For instance, the Automotive Aftermarket division utilizes tools such as a global product and service platform and a returns portal. It is also continuing to develop its e-commerce activities and relies on the close integration of marketing, distribution, and services. In addition to its own services, the Automotive Aftermarket division has also co-founded important service initiatives with industry partners, a significant contribution to keeping repair shops and distributors well informed digitally. These initiatives include TecAlliance, a company providing solutions for electronic catalog data, inventory management, and digitalization. In addition, the Automotive Aftermarket is working to promote the issue of vehicle interconnectedness by supporting the telematics platform CARUSO.
Globalization und expanding the portfolio: The Automotive Aftermarket division considers the Greater China region to provide the most significant potential for growth. The vehicle population in the Chinese market will increase enormously in the coming years as a result of strong growth expected in new vehicle registrations: While vehicles in China represented about one sixth of the worldwide vehicle population in 2018, this proportion is expected to increase to one fifth in 2023. In contrast to the largely constant average vehicle age of the other regions, the Chinese fleet is expected to be approximately one year older on average in 2023 than in 2018 (2018: 5.4 years old; 2023: 6.5 years old).
Therefore, the Automotive Aftermarket division is strengthening its global footprint especially in the Greater China as well as the Asia/Pacific growth regions, following the motto “as regional as possible, as centralized as necessary”. Regional structures are established or strengthened on the basis of a global infrastructure in order to get closer to the customer. Significant activities include establishing local sales teams, technological customer support, and dedicated development and logistics centers.
The extensive product portfolio of intelligently packaged repair solutions is also slated for global expansion. The Automotive Aftermarket division is consistently following the strategy of being a full-range supplier, offering product coverage of approximately 95%, with a particular focus on the high-volume markets Greater China and Asia/Pacific here, as well. The main theme is creating and expanding a portfolio of products and services that is tailored to the specific needs of each of the markets.
Cross-selling: The Automotive Aftermarket is currently generating more and more additional opportunities from cross-selling activities, i.e. by expanding the product portfolio with existing customers. This approach is based on the solid partnerships with the largest trading customers worldwide, as strongly evidenced by the large number of awards the Automotive Aftermarket division regularly receives from its customers. In addition, the results of the customer satisfaction surveys performed every two years are above-average, including those for the Net Promoter Score (NPS).
One example of this strategic approach is the expansion of the business in North America. A partnership in the clutch field established in 2011 between Schaeffler and a large parts dealer chain has since led to a dedicated product line of wheel bearings and gaskets. The portfolio comprises over 9,000 separate items and promises further growth for this product group in this region.