Aftermarket One-Stop Shop
Just over a year after acquiring TRW, ZF is merging the company’s two aftermarket organizations ZF Services and TRW Aftermarket to form the second largest aftermarket organization in the world. Against the backdrop of the ongoing and profound disruption of the marketplace, this decision is intended to prepare the company for future challenges.
The number of cars on the world’s roads is steadily growing. Ten years ago, the number of registered vehicles was still below a billion, at 900 million. Today, that number has surged to more than 1.2 billion. And increasingly, new cars, trucks and buses are digitally networked, meaning that they generate huge quantities of data – including data on wear and tear and spare parts. After outliving their usefulness in industrialized nations, old vehicles frequently find a new life in other parts of the world, where they continue to need spare parts for quite some time. “Thanks to innovations such as electromobility and digitization, the global aftermarket is undergoing a profound transformation,” explains Marco Neubold, who heads the ZF Aftermarket project. Since ZF’s acquisition of TRW in May 2015, he and his colleagues have been working on a solution to this issue. Starting on January 1, 2017, ZF will only have a single Aftermarket division, so that all aftermarket resources can focus on developing even more effectively tailored concepts for delivering digitally networked services in the future.
The best of both worlds
The company is expediting the integration process, but without being too hasty. “We’re taking the time to examine both organizations closely, so we can offer our customers the best of both worlds in the future,” emphasizes Neubold. Interviews with selected customers are an important part of the project; they ensure that ZF is fully aware of and capable of responding to market demands. The team surveyed major customers in the North America, Europe and Asia Pacific regions, and quickly established one thing: integration should proceed as quickly as possible. “The ZF and TRW product portfolios complement each other in many areas, which means our customers will see much faster benefits from our combined global presence,” Newbold confirms. The new organization will employ more than 8,000 people in 35 different countries and have more than 650 certified service partners.
There are several early examples of the practical synergies between customer access and the company’s newly enhanced product range: ZF Services is already selling TRW brake pads in Mexico, and has also successfully added TRW steering gears to its product portfolio in North America.Customers will continue to have local points of contact in the future, but will also benefit from the more efficient decision-making processes made possible by the company’s new global business models. “This reduces complexity in a global market where structural demarcation lines are becoming increasingly blurred,” says Neubold.
Many new components equipped with intelligent systems ex works
Against this backdrop, the organization also plans to further expand its range of services for independent workshops. Starting in 2017, for example, the TRW product brand will be incorporated into the ZF Services [pro]Tech concept, which supports workshops by providing them with, among other things, in-depth technical briefings and practical training on the entire ZF product range. This is especially important because so many new components are being equipped with intelligent systems ex works. More and more high-voltage components are networked, and increasingly, workshops are having to deal with the challenges associated with electrically powered vehicles. ZF trains mechanics to work on these vehicles. In certain regions, ZF Aftermarket will also pool all direct sales-related activities. Thus the two existing online flagship stores in the Chinese market are being combined.
This consolidation of aftermarket divisions will impact all aspects of ZF’s business. “In the future, we’ll see combinations of ZF and TRW technologies more and more frequently. The Advanced Urban Vehicle, our urban car of the future, is one of the first examples,” predicts Neubold. “Our newly combined organization is all about bringing this systems expertise to the aftermarket as well.” He is convinced that a strong position in the aftermarket could boost the company’s entire OEM business. After all, consumers start by buying a complete product, but then experience the service aspect of ZF technology in the aftermarket, once they start to need spare parts.
“If we can offer added value throughout the entire lifecycle of the product, we’ll eventually be in even greater demand as an OEM,” Neubold explains. This approach also includes the recycling and reprocessing of used vehicle components. ZF Aftermarket plans to further expand this remanufacturing activity – “remanufacturing” is the term used to describe the refurbishment of transmissions, axles, clutches and the like to industrial, OEM-quality standards – within the new organizational structure.
Systems expertise in the aftermarket
Interview with Helmut Ernst, future head of the ZF Aftermarket organization.
What are your objectives for the new organization?
ZF is a global supplier and technology leader – even in fields where the digital networking of vehicles has already reached a very advanced stage, such as automated driving, or active and passive safety systems. The new, combined organization will ensure that this systems expertise is also transferred and applied to our aftermarket activities. In the future, digitally networked vehicles will indicate when they need maintenance, and our new organization will ensure that the aftermarket is also fully aware of this capability.
What sets you apart from your direct competitors?
As I see it, the biggest difference lies in the fact that we’re taking a “one-stop shop” approach. By which I mean that we offer a broad range of products, all to the highest standards of OEM quality, which we can supplement at any time with user-specific services such as technical briefings, training courses, and comprehensive repair services. What’s more, we also serve automotive and non-automotive customers. That’s unique in the marketplace.
What role do the individual product brands play here?
Our established premium brands, such as Sachs, Lemförder, TRW, Boge and Openmatics, effectively act as the guarantors of our exceptionally high quality standards and our systems expertise in an increasingly digital, networked world. We intend to preserve the TRW name as a product brand, because the TRW brand carries significant weight in the marketplace and alongside such industry heavyweights as Sachs, Lemförder, Boge and Openmatics, will further enhance our brand portfolio.