Business in the auto industry is moderate to poor this year. The supplier Schaeffler is no exception. One indication of the difficult times: the spare parts business is running smoothly.
The crisis in the automotive industry is also affecting the supplier Schaeffler. The company from Herzogenaurach in Franconia, with its almost 84,000 employees worldwide, reported only a slight increase in sales of 0.8 percent to just under 8.3 billion euros for the first half of the year, although the second quarter was better than the first. Net profit fell slightly by one percent to 263 million euros. “We did well in the second quarter in what was certainly a challenging environment,” said CEO Klaus Rosenfeld. On October 1, the supplier Vitesco, which was formerly part of Continental, is to be fully integrated into Schaeffler. The enlarged company is expected to join the ranks of the world’s ten largest suppliers with 120,000 employees.
Spare parts in demand
Schaeffler currently has three divisions, of which the smallest is doing best: Sales in the spare parts and service business increased by 16 percent. According to the Schaeffler CEO, this is related to the currently poor sales figures for new cars. “With a result of 228 million in the first half of the year, the aftermarket business earned more than our other divisions,” Rosenfeld told the German Press Agency. “In a situation where consumers are more likely to repair cars than buy them, this helps us.”
Schaeffler believes in the future of electromobility
The much larger “Automotive Systems” division includes transmissions, chassis systems and components for electric motors, among other things, and sales increased by 0.7 percent to 3.53 billion euros. Rosenfeld assumes that e-cars will remain a growth business despite the currently weak market: “We have received orders worth three and a half billion, 2.1 billion of which are from e-mobility. Despite headwinds, business has continued to grow, in some cases even faster than the market.” After the merger with Vitesco, the products for e-vehicles are to become a separate new division, so that Schaeffler will then have four instead of three areas. The integration of Vitesco is going “better than expected”.
However, the industrial business, which includes ball bearings and mechatronics, developed worse than expected, with sales falling by five percent to 3.3 billion euros. Rosenfeld spoke of a “disappointment”. “The margin in the first half of the year was only 5.5 percent. The division’s margin should actually be in double figures and needs to get back down there.”
Source: Stern
