Working The Hub Assembly Trend

Wheel bearings, like so many product categories, have experienced a dramatic proliferation in the variety of parts; unlike many, they have also seen a rapid rise in parts pricing. For jobbers, the sale of wheel bearings into the aftermarket has largely been replaced by one-piece hub assemblies, creating space and inventory challenges.

“Hub bearings are a rapidly growing category, and will continue to provide a significant sales opportunity for jobbers for many years to come. But, because there are so many part numbers, the jobber really needs to be dialled in to what sells in his particular market,” says Neil T. Hogan, product manager for SKF USA.

It should come as no surprise that the move to hub assemblies is largely the result of following OEM manufacturers’ designs. As a result, one of the biggest challenges in recent years has been parts proliferation. With global vehicle manufacturing, the total application coverage for wheel bearings has grown significantly.

“It’s not like the old days where one [part] number fit all of the GM four-wheel drive cars. [Back then] you had one bearing that fit quite a lot of cars. Now it’s very specific,” says Tim Burchill, co-owner of Burchill Automotive Ltd. in Mitchell, Ont. “GM is starting to cut down on doing one bearing for four models, because they’ve already shut down two divisions, Oldsmobile and Pontiac. Back then you could buy the Chevy Malibu with the same bearings as the GrandAm. Then they realized it’s not good to have that kind of option. Do it right and do it on one car only. It’s going to hurt us because [bearings] today apply to fewer and fewer models.”

“Of course, bearings are everywhere there is rotation. For most jobbers, over 80% of your bearing sales will come from wheel-end bearings. Most of the rest will be differential or transmission bearings,” says Wendell Hays, senior product manager, brake and wheel end products, Federal-Mogul. “In certain markets, you could have significant demand for agricultural bearings as well.”

One company that has a big hand in both OE and aftermarket wheel bearings worldwide has been Schaeffler Group Inc., most notably under its FAG brand. Richard Neilson, Schaeffler’s marketing manager, automotive sales, says the trend toward one-piece hub assemblies is not new.

“We actually retooled the plant in Joplin, Mo. to build these things back in the ’80s for Chrysler Jeep Cherokees and Grand Cherokees, and from there it just evolved. The car companies wanted to reduce complexity in terms of assembly time, and they didn’t want to have as many components lying around, [and adopted a] sort of less-is-more approach.

“What we started doing was taking the actual bearings and then adding value to them. We would encase them in a hub assembly, put bolts in it and then ship them off to the customer, and all that person on the line would have to do is take that whole unit, put it on the corner piece and bolt it in, and the assembly is done.”

Along with the increased complexity of the units–adding integrated ABS sensors, for example–has come increased price, which has naturally led to an increase in the “value option.”

“If price is the motivator and a value-line product is selected, you are likely to get a part that may look the same, but will not perform the same. Value-grade hub assemblies typically last about 25% to 35% [less than] the OEM hub,” continues Hogan. “Many have lower-quality components that can lead to safety issues like ABS malfunctions, brake pulsations, or handling problems.”

OE manufacturers have also trended toward sealed hub assemblies because of their superior contamination exclusion. Contamination causes premature bearing failure, and to support the longer warranties available on new vehicles today, OEMs have pushed for parts that are designed to last longer. The purpose of a hub assembly is to control the bearing environment and maximize life expectancy.

“Evaluate your coverage versus [unit] sales popularity to identify missing coverage. Focus your inventory on wheel-end coverage. Hub assemblies have a higher average unit price, resulting in a larger inventory investment. However, the benefit is a larger average sale price driving top-line sales,” continues Hays.

“If you don’t have it in stock, the sale will go to someone who does. Maximize your coverage in the category by focusing your inventory investment in premium product. Keep your short line short by limiting coverage to vehicles that are a minimum of 12 years old,” he says. “The original hub assembly typically lasts at least 130,000 km. Because the cost of replacement is high, consumers will not tolerate a product that fails prematurely. Don’t overlook your sealed wheel bearing coverage. Many of the smaller, more fuel-efficient vehicles still use the smaller sealed bearings instead of hub assemblies.”

With global vehicle manufacturing, the application coverage has also grown. Many wheel bearing manufacturers work out inventory profiles to help lower carrying costs while supplying full-line coverage. In some cases, they can offer an ABS hub unit that will cover applications for vehicles with and without ABS. This can help jobbers extend their sales opportunities while maintaining lower inventory costs.

“There are so many vehicles that there’s no way any one bearing manufacturer can make all of the platforms. That’s why the car companies will split them up and award contracts to different bearing companies. In the aftermarket is where we do programs. We do a complete wheel and hub program for the aftermarket, which consists of hub units for Mazdas, Toyotas, GM, Ford, and the list goes on,” says Doug Furlas, Canadian sales manager for aftermarket, Schaeffler Group Canada.

SKF, for instance, has a variety of tools available for jobbers to help them tailor their inventory to meet local requirements. The firm uses a combination of vehicle population information and local market data to help determine the best inventory possible. SKF also offers a vendor-managed inventory program that assures jobbers the most cost-effective inventory to service their market requirements.

There’s different market data available out there for those willing to make the effort with manufacturers. Make sure you’ve got the right inventory mix to know what vehicles are in your geographical area.