Aftermarket A Cash Generator in the Shadow of Transformation

The aftermarket is emerging as a stable source of revenue amid the transformation—and, for many suppliers, a key pillar of earnings. However, value creation does not happen automatically.

While the original equipment business is increasingly characterized by margin pressure, high investments in new technologies, and volatile demand, a long-underestimated sector is coming into sharper focus: the aftermarket. A key reason lies in the fundamentally different profitability profiles of the original equipment and aftermarket businesses. In the new-car and original equipment business, margins are not only structurally lower but also significantly more dependent on economic conditions and technology. In contrast, OEMs and suppliers generate a disproportionately large share of their operating profit in aftersales—despite a significantly smaller share of revenue. For suppliers, it is evident that companies with a significant aftermarket presence achieve significantly higher EBIT and cash conversion rates than competitors driven solely by OE business.