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Training, Remanufacturing: ZF's Strategy for Aftermarket Success

Ben Smart - ZF Group
Head of Aftermarket North America


Fernando Mares By Fernando Mares | Journalist & Industry Analyst - Tue, 08/01/2023 - 15:44

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Q: How big is ZF’s presence in the aftermarket and how are you planning to maintain this position or increase your share? 
A: ZF is a leading global aftermarket and fleet solutions provider, with strong brands LEMFÖRDER, SACHS, TRW and WABCO. We are the leading company in the aftermarket for shock absorbers under the renowned BOGE brand, which is highly recognized in Mexico. Leveraging its success, we have recently introduced more brands and product lines in the region.

Under the TRW brand, we offer a diverse range of automotive aftermarket products, including components for braking systems, steering and suspension. Clutches are offered under the SACHS brand. Our portfolio is extensive and this has allowed us to position ourselves favorably compared to our competitors, particularly in the realm of shock absorbers. 

We take pride in our top position in this market and have capitalized on this success by effectively promoting our other brands in various areas, with a significant emphasis on digital marketing. 

Q: What new products or services are you introducing to the Mexican market? 
A: We are in the process of launching new products, including discs, to complement our existing portfolio. Additionally, we have introduced digital initiatives, such as an online quotation app that assists smaller installers and repair shops in providing accurate pricing and ordering the right parts for their customers. This app also streamlines invoicing and enhances the overall customer experience.

Furthermore, we have established Más Mecánico, an online community for mechanics, offering technical tips, documentation and a platform for communication and knowledge-sharing among mechanics. Training is also a significant focus for us, with a broad range of modules covering various topics, attracting a large number of mechanics seeking to enhance their skills and knowledge. These initiatives reflect our commitment to expanding our offerings, embracing digital solutions and fostering a supportive community for mechanics, all of which contributes to our continued growth and success in the market.

Q: How has acceptance of ZF’s digital solutions evolved over the past three years? 
A: It has evolved significantly, especially in response to the pandemic and the accelerated shift toward online purchasing behaviors. We have adapted not only in our sales channels but also in our training capabilities. While face-to-face training remains important, we have expanded our reach through online training modules, which have been well-received, particularly in Mexico, where there is a greater acceptance of digital-native solutions among installers and technicians.

The automotive industry is experiencing rapid change, with vehicles and their technology constantly evolving. Features like Advanced Driver Assistance Systems (ADAS) and other sensor-based technologies are now becoming standard and it is essential for installers to stay updated and well-trained in handling these new components. Our digital reach has been instrumental in spreading awareness and education regarding these advancements, helping mechanics adapt to the changing landscape.

With the aggressive pace of change in the automotive sector, our diverse training programs have been crucial in ensuring that installers are equipped to handle modern vehicle systems and perform replacements effectively. The increased accessibility to digital training has played a significant role in facilitating this education and knowledge-sharing among professionals in the industry.

Q: How did ZF face the drop in sales during the pandemic and what does the current recovery, with new car sales increasing by over 20% from January to May 2023, mean for the company? 
A: Like many companies, we experienced a shock during the COVID-19 pandemic but we quickly bounced back, especially in the aftermarket. Since May 2020, we have seen unprecedented year-on-year growth. Managing the supply chain has been a challenge but we have taken control of the situation, gained market share and introduced new product lines that have been well-received.

Regarding new vehicle sales, we believe growth figures might be somewhat exaggerated due to backlogged purchases. Still, the aftermarket has proven resilient in previous downturns and we expect double-digit growth for the rest of the year, compared to last year.

Q: How is ZF adapting to the ongoing electrification of the automotive industry? 
A: ZF leads the way in electrification globally, offering electric drivetrains for a wide range of vehicles, from bicycles to class-8 trucks and buses. Our expertise in R&D and production in the original equipment sector transfers to the aftermarket as electric vehicles age and require maintenance.

Maintenance of electric vehicles differs significantly from internal combustion units due to the unique expertise and education needed for high-voltage systems. To address this, we provide a comprehensive three-level high-voltage training program to ensure safety and competence among installers. 

Q: What drove the decision to expand your facilities in Queretaro? What are your investments in Mexico aimed at? 
A: One of the main opportunity areas in Queretaro is in commercial vehicle technology. ZF acquired WABCO, the leading commercial vehicle technology business globally, a couple of years ago and it is now fully integrated into our business. We see significant growth potential in this sector and Queretaro will support our operations in Mexico and the US.

Monterey is another significant area of investment, primarily focused on R&D. We recognize the talent pool within Mexico and aim to leverage and capitalize on it fully.  

Q: What actions is ZF taking in terms of sustainability in the aftermarket sector? 
A: Carbon neutrality by 2040 may seem distant but it is a comprehensive goal that extends throughout the entire supply chain, not just within ZF Group. Each division has its own targets aligned with this vision. In the aftermarket, our contribution to sustainability lies in remanufacturing, with used products being refurbished to the same quality as new ones. In Mexico, we engage in extensive remanufacturing activities, offering products with the same warranty but at a more affordable price.

Remanufacturing not only benefits sustainability efforts but also addresses affordability and availability concerns, especially at times of supply chain uncertainty. We strive to be a leader in remanufacturing, focusing on components like steering systems, air compressors, torque converters and transmissions. For instance, when remanufacturing a transmission, we can reutilize over 80% of the original parts, significantly reducing waste and promoting sustainability.

Q: What are the company’s plans for the mid and long term? 
A: In the short term, our focus is on numerous product launches, expanding our portfolio and enhancing our digital services output. We anticipate significant growth and stronger product lines over the next 12 months.

Looking further ahead, we are adopting a flexible approach, considering different scenarios in the future through our CASE strategy. CASE stands for Connected, Autonomous, Shared, Electrified and Sustainable. We are investing in technologies that connect vehicles to the cloud and traffic systems, developing software that complements our parts and platforms.

For instance, our ProAI platform enables autonomous shuttles to operate safely and efficiently, creating opportunities for the aftermarket to support a new service network. As electrification and sustainability continue to grow, we remain committed to achieving our targets and embracing changes in the automotive landscape.

ZF Group is a global technology company supplying systems for passenger and commercial vehicles through four verticals: Vehicle Motion Control, Integrated Safety, Automated Driving and Electric Mobility. ZF offers comprehensive product and software solutions for established vehicle manufacturers and newly emerging transport and mobility service providers.

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