We sell our products primarily to four groups of customers around the world:
Truck and bus OEMs;
Commercial vehicle aftermarket distributors for replacement parts and services
and commercial vehicle fleet operators for management solutions and services;
Trailer OEMs, and
Major car manufacturers.
Our largest customer is Daimler, which accounted for approximately 10% and
11% of our sales in 2015 and 2014, respectively. Other key customers include
Volvo, Ashok Leyland, BMW, China National Heavy Truck Corporation (CNHTC), Cummins,
Fiat (Iveco), Hino, Hyundai, Krone, MAN Nutzfahrzeuge AG (MAN), Meritor, Meritor
WABCO (a joint venture), Paccar (DAF Trucks N.V. (DAF), Kenworth, Leyland and
Peterbilt), First Automobile Works, Otto Sauer Achsenfabrik (SAF), Scania, Schmitz
Cargobull AG, TATA Motors and ZF Friedrichshafen AG (ZF). For the fiscal years
ended December 31, 2015 and 2014, our top 10 customers accounted for approximately
48% and 54% of our sales, respectively.
The largest group of our customers, representing approximately 57% of sales
(60% in 2014), consists of truck and bus OEMs who are large, increasingly global
and few in numbers due to industry consolidation, as well as a smaller number
of off-highway (agricultural and construction) OEMs. As truck and bus OEMs grow
globally, they expect suppliers to expand with them beyond their traditional
markets and become reliable partners, especially in the development of new technologies.
WABCO has a strong reputation for technological innovation and collaborates
closely with major OEM customers to design, develop and deliver technologies
used in their products. Our products play an important role in enabling further
vehicle safety and efficiency. At the same time, there are few other suppliers
who compete across the breadth of products that we supply globally.
The second largest group, representing approximately 26% of sales (26% in
2014), consists of the aftermarket distributor network that provides commercial
vehicle operators with replacement parts as well as a range of services. This
distributor network is a fragmented and diverse group of customers, covering
a broad spectrum from large OEM-affiliated or OEM-owned distributors to small
independent local distributors. The increasing number of trucks, buses and trailers
on the road worldwide that are equipped with our products continuously increases
market demand for replacement parts and services, which generates a growing
stream of recurring aftermarket sales. In addition, we continue to develop an
array of service offerings - such as diagnostics, training and fleet management
solutions - for repair shops and fleet operators that further enhance our presence
and growth in the commercial vehicle aftermarket.
The next largest group, representing approximately 11% of sales (10% in 2014),
consists of trailer manufacturers, a particularly fragmented group of local
or regional players that are widely diverse in business size, focus and operation.
Smaller trailer manufacturers are highly dependent on suppliers such as WABCO
to provide technical expertise and product knowledge. Similar to truck and bus
OEMs, trailer manufacturers rely significantly on WABCO products for safety
and efficiency functions through superior technologies and customized applications
of such technologies.
The smallest group, representing approximately 6% of sales (4% in 2014), consists
of passenger car and SUV manufacturers that purchase our electronic air suspension
systems and vacuum pumps. Electronic air suspension is a luxury feature with
increasing penetration that exceeds market growth. Vacuum pumps are used with
diesel and gasoline direct injection (GDI) engines; as a result, WABCO's vacuum
pumps have above-average growth rates due to increasing diesel and GDI applications
in Europe, Asia and North America. These customers are typically large, global
and sophisticated; they demand high quality in products and services.
We address our customers through a global sales force. It is organized around
key accounts and customer groups and it interfaces with product marketing and
management to identify opportunities and meet customer needs across our product
portfolio and throughout different regions of the world.
