In a dynamic market environment, Lifecycle Solutions is pursuing a clear course of action: the business should be innovative, global and competitive. In an interview, Stefan van Dalen and Dr. Mario Winkelhaus explain how this goal is to become reality.

Lifecycle Solutions is facing a variety of challenges in a fragmented market: price pressure from new competitors, rising labor costs, market shifts towards Asia and America; in addition, the increasing complexity of modern vehicles and advancing digitalization are presenting the Business Group with new challenges. Stefan van Dalen, Managing Director Lifecycle Solutions, and Dr. Mario Winkelhaus, responsible for Strategy Lifecycle Solutions, explain how the Business Group is meeting these challenges and what opportunities they see. The conversation is part of a series on the results of the annual strategic planning. The interview for the Business Group Lighting has already been published, the results for Electronics will follow shortly.

Mr. van Dalen, hand on heart: Haven't the past year and a half been a single crisis management for Lifecycle Solutions?

Stefan van Dalen: I wouldn't call it a crisis. But it was definitely a time that was not easy and in which we had to do our homework. We have not only reacted, but deliberately taken the initiative: streamlined processes, streamlined structures, adapted our network – all this to put the organization on a sustainable foundation. Of course, there were many difficult decisions among them. But every single measure followed a clear goal: to move into the future more efficiently, adaptably and resiliently.

After all, many measures were implemented in the Lifecycle Solutions division, including the closure of the Nellingen site, assembly in Großpetersdorf and headcount reductions at Hella Gutmann.

Mario Winkelhaus: Our strategy is based on three clear guidelines: to internationalize our business, customer proximity and competitive cost structures. We base every decision on this. For example, we expanded our global market presence – for example in Asia – and expanded our product portfolio in a targeted manner, for example by re-entering the thermal business. And we also had to make structural adjustments to reduce overcapacity, but also to follow the expected growth in the Asian and American markets. We want to remain attractive and interesting, invest in new products, open up new markets. This is only possible if we have the necessary financial resources and the right cost structures.

What concrete successes have you seen since then?

Stefan van Dalen: We didn't take any of the measures we implemented lightly. But I believe we are on the right track. One example: At Special Original Equipment, i.e. our commercial vehicle business, order intake in the first half of the year was around 10 percent above our target. Major international customers such as John Deere reflect to us that we are on the right track with our adaptations. We are expected to be close to the customer and at the same time offer competitively cost from an international production network.

How do you assess the current situation of Lifecycle Solutions?

Mario Winkelhaus: In the Special Original Equipment sector as well as in the spare part and workshop business, we do not expect any significant impetus from the market in the short and medium term. At the same time, the growth we are currently assuming is coming disproportionately from outside Europe. Competition from Asian providers is exacerbating the pressure. Overall, we are still too European at Lifecycle Solutions. For us, this means that we must remain strong in Europe, but continue to globalize our overall positioning. However, I don't see this as a challenge, but as a huge opportunity.

Stefan van Dalen: We have a strong basis: a broad portfolio of lighting and electronic products as well as a leading position in the European aftermarket. In the Special Original Equipment segment, we have been observing stabilization since the fourth quarter of 2024. The decline in sales is flattening out, while order intake is developing encouragingly. According to current planning, we expect stable growth again from 2027 – not least because we reacted early to the new market reality described by Mario and took appropriate measures. In the aftermarket, we see that the entire industry has been under significant pressure since the first quarter of this year, experiencing either declining or stagnant developments. The market is acting very cautiously, and competitive pressure is high.

Overall, you expect Lifecycle Solutions to grow again in the medium term. What do you expect specifically?

Stefan van Dalen: Our goal is to grow annually in the mid-single-digit percentage range until 2030, maybe even a little more. This would put us well above market growth. This is ambitious, and of course also fraught with some uncertainty. But our business model allows for that. This year – and to some extent next year – is above all still a phase of consolidation. After that, according to everything we can currently estimate, we expect opportunities in all our business areas. But it is also clear that this will not fall into our laps. We have to hold our own in a tough competition and do everything we can to take advantage of the opportunities that lie ahead of us.

How do you want to go about that?

Mario Winkelhaus: We have to remain attractive. The re-entry into the thermal business is a good example, but this also includes the expansion of the truck business in IAM. In the area of workshop products, we are increasingly focusing on e-commerce business and white label strategies. This means that we sell our solutions and products not only under our own brand, but also on behalf of our partners – for example, in the field of remote services and diagnostic devices. This is how we open up new target groups. In addition, we are driving digital innovations with Hella Gutmann, especially in the areas of ADAS and connectivity. This is promising, but also associated with high investments that we must be able to afford. With regard to Special Original Equipment, we want to open the sales channel for the entire FORVIA portfolio and establish Special Original Equipment as a central provider for commercial vehicle customers. Our Goal is to provide customers with a comprehensive offer – regardless of which division of the FORVIA Group the products come from. Last but not least, the following applies to all areas: We must further expand our regional presence and orient ourselves even more strongly towards Asia and America.

In Asia and America, Lifecycle Solutions currently has quite few and rather small locations compared to Europe.

Stefan van Dalen: That's right, we may have some catching up to do. We therefore have to look at our network. And we need to see if we need to invest in new production facilities in North and South America. We are also examining the extent to which we need to expand our production capacities in India in order to meet market demand there.

What is your overarching vision for Lifecycle Solutions in the long term?

Stefan van Dalen: The vision is derived from our vision of extending the life cycle of all vehicles and machines. This is good for our customers and our planet, but also for us as a business group that can participate in these global megatrends. A good balance is crucial on this path: a lean cost structure and at the same time innovative products that are attractive and competitive.

Mario Winkelhaus: We want to make a difference – not only for ourselves, but also for our customers, partners and employees. Every challenge opens up new opportunities, which we actively tackle.

Stefan van Dalen: Exactly. Our greatest strength lies in our dedicated team and our strong product portfolio. Yes, change is often difficult, but it is central to remaining fit for the future. Our path is clear: we want to ensure sustainable, efficient mobility and maximize the value of vehicles in the long term.

Mr. van Dalen, Mr. Winkelhaus - thank you very much for the interview.

The individual strategies of BG Lifecycle Solutions at a glance: