BERLIN - The world's top two automotive suppliers are expected to unveil new aftermarket strategies in the near future as they look to increase their share of an industry worth $500 billion a year.
Delphi Automotive Systems has been recruiting aftermarket specialists over the past few months. President J.T. Battenberg III said his company was doing just $2 billion of aftermarket business a year.
He added: 'There is a lot of potential in this area for us. We have been hiring a number of key people and will be announcing our aftermarket strategy in the next few weeks.'
Visteon Automotive Systems' President Craig Muhlhauser said: 'The aftermarket is very important to us. It will be particularly helpful in our strategy to increase business outside Ford.'
Visteon's strategy is based around such products as aftermarket radiators and air conditioning systems.
Both chief executive officers also see the potential to diversify out of the auto industry as protection against cyclical downturns.
Muhlhauser said: 'We obviously want to be in control of our own destiny. What has been successful in the past will not necessarily be so in the future, and we have to change.
'We will be looking selectively outside the industry. Some of our engineering applications have a degree of use in other areas and I am thinking here of power generation - natural gas compressors, blowers, and fans. We are also looking at outside opportunities for our voice activation system.'
The obvious attraction is that margins are likely to be much higher outside the auto industry. Muhlhauser said: 'We make engine control units similar to those found on airliners, but ours are one fiftieth of the cost and we still make money - but it is important we remain focused on the auto industry.'
Battenberg said: 'Non-automotive provides us with an opportunity. We already have wiring business with Boeing and our computer business is small but significant. We have just acquired Dae Sung in South Korea which has half of its business in consumer electronics.'