Schaeffler Boosted by Hybrid Car Demand in China and Europe

Schaeffler AG is seeing greater demand for parts used in hybrid cars, a welcome boost for the German parts maker attempting to shift its business toward battery technology.

The ball-bearings maker, with a long history in components for combustion engines and transmissions, is picking up more business for hybrid car parts in China and parts of Europe, said Matthias Zink, who heads Schaeffler’s automotive business. In the US, customers have been doubling orders related to some smaller-volume contracts.

Demand for electric-vehicle products, on the other hand, is “flattening, especially in Europe and Germany,” Zink said in an interview. Schaeffler supplies major carmakers including Volkswagen, General Motors, Ford and Stellantis.

The pickup in hybrid technology is giving the German supplier some breathing room as VW and General Motors Co. tweak strategies to cope with volatile EV demand. Schaeffler and its peers are under pressure from clients to make cheaper products as sales for battery-powered cars wane in Europe.

Stellantis NV is considering dropping some suppliers and producing components on its own to reduce costs, while also adjusting battery investments. Continental is struggling to improve profitability of its automotive business as it cuts thousands of jobs and considers asset sales. At the same time, Chinese brands expand in the region, with BYD Co. planning to offer its electric Seagull hatchback next year below €20,000 ($21,500).

Schaeffler’s billionaire owner family — which also controls parts maker Vitesco Technologies Group AG and is the dominant shareholder in Continental AG — has been reshaping its industrial empire to keep pace with the EV shift.