Tell us a bit about your business. When were you founded, where are you based and how many people do you employ?
For more than 70 years, the Schaeffler Group has been a global supplier to the automotive and industrial sectors, manufacturing high precision components and systems for drivetrain and chassis applications, as well as rolling and plain bearing solutions for a wide variety of industrial applications. The Schaeffler Group generated sales of circa €14.4 billion in 2019 and employs 83,700 people worldwide.
Schaeffler (UK) employs around 430 people across our three sites in Sheffield (manufacturing), Hereford (sales and distribution) and Birmingham (sales and marketing). The company’s presence in the UK market began in 1955 under the company’s former name, INA. The business was expanded in 1989 with the opening of the LuK manufacturing plant in Sheffield.
What does the business do?
Schaeffler (UK) comprises three divisions: Automotive Technologies, Automotive Aftermarket and Industrial.
The Automotive Technologies division develops and manufactures products for engine, transmission and chassis applications from passenger cars to commercial vehicles and off-highway. These include components and system solutions for vehicles with drivetrain based on the internal combustion engine, as well as for hybrid vehicles and all-electric vehicles. Core products include clutch systems, transmission components, torsion dampers, valve train systems, camshaft phasing systems and electric drives.
The Automotive Aftermarket division is responsible for the replacement parts business worldwide. It delivers components and holistic repair solutions to the automotive spare parts market for passenger cars, light and heavy commercial vehicles and tractors.
The Industrial division supplies precision rolling and plain bearings, linear and direct drive technology, maintenance and Industry 4.0 products such as condition monitoring systems.
How is business? What’s the outlook for the year ahead?
In the UK and Europe, we are optimistic about the future although we believe the recovery here will be slower than in regions such as China, where our export sales have started to rise again.
The Industrial division has an interesting impact on commercial vehicles as it can provide us with an insight into where things are going. In simple terms, the industrial machines are needed to help build vehicles and parts for vehicles, so it is a good indicator of what is coming next. If machine tool sales are on the rise, this usually means that prospects for the automotive OE sector will be better. In the UK, we had a strong start to 2020 with distributors stocking up in readiness for Brexit. We then saw a drop in sales during the first lockdown. We believe the Industrial division will recover.
What are the big issues or technological advances that fill you with positivity?
We would expect our Automotive Technologies business to recover back to its 2019 levels in the coming years. The big challenge is the country of origin, i.e. where parts and vehicles are made and their effect on import and export tariffs. This will govern what level of electrification of vehicles is required by the automotive industry and the investment levels in the UK automotive sector for the production of vehicles here.
As for technological advances, the automotive industry is moving away from internal combustion engines to hybrid and all-electric vehicles. This puts Schaeffler in a strong position, due to our huge investment in new product development in this area. We already have a wide portfolio of components and system solutions for hybrid and electric vehicles.
The future also looks promising for fuel cell technology for trucks and HGVs. This is an area in which the Schaeffler Group is building a strong position across its divisions as part of our hydrogen technology initiatives. Schaeffler has recognised the huge potential of hydrogen technology as an energy carrier of the future. We have already developed key components for fuel cells and fuel cell stacks, called metallic bipolar plates.
On the Industrial side, there are also reasons to be positive. This move towards the electrification of vehicles requires new batteries and new types of motors to be developed and manufactured, which will require our industrial expertise.
The Automotive Aftermarket should help bring stability to our UK business during this period of technological change. This is because the market for passenger car clutches, powered by diesel engines, did not reach its peak until 2016. As there is normally a five-year lag between peak clutch sales and the positive effect on clutch aftermarket sales, we expect 2021 to reap the rewards of this. There is much to be optimistic about.
Greig Littlefair, Managing Director, Schaeffler (UK)