Facing diminished profit potential, the major manufacturers of shock absorbers continue to educate the motorist about the dangers of using worn out shock absorbers in an effort to lift sales in an increasingly competitive aftermarket. Matthew Beecham reports.
Ride control is basically governed by a vehicle's suspension system, including its shock absorbers and struts. Shocks and struts help maintain vertical loads placed on a vehicle's tyres to help keep the tyres in contact with the road. A vehicle's ability to steer, brake and accelerate depends on the contact between the vehicle's tyres and the road.
Tenneco believes that too few drivers are aware of the dangers of worn out shock absorbers. Tests have shown that driving with 50% worn shocks can increase emergency braking by 2.6 metres. In addition, worn shock absorbers can increase a driver's reaction time by up to 26%, cause uneven headlights - which can dazzle oncoming drivers - increase the risk of the vehicle aquaplaning by nearly 10% and can cause the vehicle to lose control when cornering or caught in a cross wind.
In the period between January 2004 and March 2005, Tenneco tested some 16,500 cars across Europe to measure the level of wear on suspension parts. The results showed that 47% of all vehicles tested in Germany, Italy and the Benelux with an average of 111,000 km on the clock, have seriously worn or damaged shock absorbers. Tenneco's fleet of eight test vans travelled across Europe, stopping at garages to allow motorists to have their shock absorbers tested free of charge as part of the company's Testing Days on Tour programme.
The same lack of driver awareness of the dangers of worn-out shocks appears to exist in the US. Last summer, KYB America LLC launched a service centre initiative aimed at creating partnering relationships between KYB, its distributors and their service centre customers. KYB estimates that 86% of vehicles arriving at the scrap yard still have their original shocks and struts fitted. The company believes that this illustrates the need for an initiative to capture the 'millions of lost sales and lost opportunities.' Mike Howarth, senior vice president of KYB America, said: "Worn, as opposed to failed shocks and struts, are renowned as being difficult for technicians to identify, therefore making it extremely difficult for service writers to justify the sale to the motorist." KYB (formerly known as Kayaba) is one of the world's largest manufacturers of original equipment shock absorbers, supplying around 50 million shocks every year to vehicle makers.
For its part, ArvinMeritor has launched an informational website designed to educate consumers on shock and strut care. The site, http://www.checkyourshocks.com/ includes the basics such as how shocks and struts work, and how shocks and braking impact each other. The site also lists warning signs that will alert drivers to replace their shocks or struts.
From a technical perspective, Georgios Printezis, key account manager, Asia and Far East, Magneti Marelli Suspension Systems, believes that the forces driving the engineering of conventional shock absorbers include weight reduction (through the diameter size reduction and the use of more performing materials and light alloys), noise reduction (through the use of valves performing a progressive damping), and reduction of rod sliding friction (through the use of sealings having new design and materials). In addition to shocks and springs, Magneti Marelli supplies suspension systems and modules and structural components for suspensions.
While shock absorber technology is becoming more and more important in the OE world, it is increasingly perceived as a commodity in the aftermarket. Yet the shock absorber continues to play an ever more important role in a new vehicle, especially given the increasing fitment of electronic devices like ABS and ESP. "If you don't have a good shock then you cannot ensure a good contact between the road and the wheel," said Alex Gelbcke, Vice President, Aftermarket Europe, Tenneco Automotive Europe. "That basically renders all those electronic braking systems ineffective. We are working relentlessly on improving our shocks, including a heavy focus on the valve design and quality of oil in order to have consistent damping and improving the quality of seals to avoid leakage and ensure more durability."
Tenneco produces some 335,000 shock absorbers every day, equivalent to about 85 million units annually in its facilities in Europe, North America, South America and Asia. Tenneco markets its ride control products under the Monroe brand name. According to Gelbcke, Tenneco has always positioned the Monroe brand in the safety arena. "Going forward," he said, "we want to do that in a slightly different way. We found that our safety message was more considered by people as being a marketing slogan than anything else. The reality is that we are building our aftermarket shocks on the same lines as our OE shocks with the same engineering and the same quality constraints. The people that are most concerned about safety are the OEMs. So we clearly want to position Monroe as an important OE player which is quality and safety conscious. The big deal in the aftermarket today is to ensure that the independent aftermarket keeps its place on the scene. In that respect, we are dedicated to the future of the independent aftermarket. For that reason, we want to help improve the independent aftermarket's ability to compete by training people as much as we can. So we have been investing huge sums in training programmes - whether in-house or external, together with our partners like TRW, SKF and Valeo. We are also going to change slightly the angle of our communication. We think that one thing that is damaging the aftermarket is the number of promotions with zero messages. This is basically pushing the market further towards becoming a commodity. So we want to resurrect that image."
Huge aftermarket opportunities in North America--
Over the past year or so, KYB has expanded its sales force in North America, taking the long-established players like Tenneco Inc's Monroe and ArvinMeritor's Gabriel brands head-on. "We have been operating in North America for the past 30 years," said Howarth. "Until a few years ago, our shock absorber market share was about 5%. We were historically seen as a specialist company rather than a mainline shock and strut supplier to the aftermarket. But over the last three years, we have successfully managed to change that perception to the point where our market share has risen to 14%. We are about to start business with one of the major programme groups in the US. That launch will lift our market share to 20%. The single most important factor is product quality. We have always sold into the aftermarket a product that is made on exactly the same lines as our OE product and made using the same raw materials. Another strength that we have is offering the right type of training programmes for technicians to be able to identify a worn ride control on the vehicle and then communicate and justify that sale to the motorist. For example, we have been able to take workshops from selling just eight units a month to consistently over 70. So there is a huge opportunity to expand the market. I think it comes down to the fact that garages all over the world are totally preoccupied with replacing failed parts rather than looking for worn parts It applies to shocks and struts as well as a lot of other products."
--and emerging markets like China--
Because the North American and Western European automotive markets are relatively mature, OE manufacturers are increasingly focusing on emerging markets for growth opportunities, particularly China, Eastern Europe, India and Latin America. This increased OE focus has, in turn, increased the growth opportunities in the aftermarkets in these regions.
In China, for example, ZF Sachs has a substantial manufacturing presence in Shanghai, producing chassis components for cars and commercial vehicles. The company also operates a site in Changchun. Michael Hankel, Member of the Board of Management, Suspension Division, ZF Sachs AG, told us: "In the shock absorber business, we have a good tradition in China. We have six years of joint venture activity in Shanghai. We have a huge plant there. Last year, we entered into a joint venture with the DongFeng shock absorber company, a producer of shocks for the heavy truck market. This joint venture became active in July 2005. We have another wholly-owned company in Shanghai producing shocks for trains." On a global basis, ZF Sachs produces some 240,000 shock absorbers every working day, equivalent to 55 million annually.
Last month, Tenneco raised its majority stake in the Beijing Monroe Shock Company from 51% to 65%. Tenneco first entered the Chinese market through its joint venture in Beijing with the Beijing Automotive Industry Corp Today, this joint venture supplies ride control parts to OEMs from its newly-opened 34,000-m². Tenneco believes that as the Chinese vehicle mix is shifting to smaller cars and the fleet begins to age then the aftermarket will expand. What is the outlook for growth in the Chinese aftermarket business? "It is a very fragmented market right now in China," said Tim Donovan, executive vice president and general counsel and managing director, Asia-Pacific, Tenneco Inc. "There's no clear distribution system for aftermarket like there is in the US. We're currently launching a very detailed plan to leverage our strong Monroe brand in China with the goal of capturing a 30% share of the aftermarket by 2009." The company currently has five exhaust joint ventures and one ride control joint venture in China. Why only one shock plant? "Shocks are relatively cost-effective to ship, so having multiple facilities, each in proximity to the customer, is not as important as it is for exhaust facilities," added Donovan.
--and Eastern Europe, too
Today, Tenneco has about 22% of its European OE ride control manufacturing capacity in Eastern Europe. That's up from about 4% a few years ago. "Tenneco moved into Central and Eastern Europe and the Middle East ahead of the game," said Gelbcke. "We entered these regions in the early 1990s and then other players came in. By the end of 2004, 42% of our shock absorber sales revenues were generated in the emerging markets. So clearly these regions are key to our business."
Tenneco's marketing approach in these emerging markets clearly differs from the mature markets of Western Europe. "The major difference is due to the purchasing power of the consumer," added Gelbcke. "In Western Europe, motorists maintain their car because they have to. In Eastern Europe, however, a lot of people regard their car as an investment. As they need to maintain that investment, they are prepared to pay for quality."
ZF Sachs operates a large plant in Turkey producing shocks for the OE and aftermarket. ZF's Hankel told us: "We are always looking to Eastern Europe to see how the consumer and production markets will develop. We see this as a very dynamic market place since a lot of OEMs are now focussing on creating new capacities in Eastern Europe. We are watching this region very carefully."
This article is based on research undertaken as part of the recently published just-auto report, 'Global market review of shock absorbers - forecasts to 2012 (download)'. For more details please follow this link.