Remanufacturing Update

Truck Parts & Service Staff March 4, 2012

A Look At Differentials

Vertical integration and technology are impacting remanufacturing.

Remanufacturing is a vital part of the truck parts aftermarket. Truck Parts & Service has launched a year-long series on the subject of remanufacturing. This issue’s installment contains an interview with Dave Olsen, CEO of TransAxle.

TPS: What are the key issues impacting differential remanufacturing?

Olsen: The differential is a critical part of transferring the energy from the transmission out to the wheel end. With that comes a lot of different ratios and gearing.

What you ended up with is a lot of variety and a part number explosion over the last 10 years as fleets have tried to work to maximize fuel economy. This has put a lot of pressure on people that remanufacture to keep up with all those changes.

The other thing you have is a lot of vertical integration. If you go back 20 years ago there were two to three principle players. Now you have a lot of vertical integration with Daimler doing their own thing and Paccar and Volvo doing their own thing and that has made for a much more diverse product offering than what it used to be.

The ramification of that is there are fewer people remanufacturing. Where you used to have 12 choices in a market, you might have four or five now. There are more national players rather than regional or local players in that market, and that is a function of the product becoming more diverse.

TPS: How does a reman differential fit into a distributor’s parts strategy?

Olsen: We all are looking to be a better more complete service to customers, so if you have customers who are looking to you as their parts solution, certainly drivetrain is a critical part of that.

It is a logical extension of your existing relationship with your fleet customers.

As distributors continue to fight the OE channel — which is viewed as a complete supplier of drivetrain components — it is imperative that distributors match that perception.

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