FAIRLAWN, Ohio—Continental A.G.'s ContiTech North American branded aftermarket belt business has hit new heights in the past several years, gaining more market share and improving brand awareness in the process.
It took another giant step in that direction recently when the company acquired the assets and business of CRP Industries' Continental-related belt and belt kits program, in effect bringing all of its Continental-brand automotive aftermarket belt products in-house as part of its North American operation.
Basically, the deal has made ContiTech North America a one-stop shop in the automotive aftermarket sector, said Rolf Sudmann, head of Continental's global aftermarket business.
Included in the acquisition are import and domestic Continental automotive multi-V-belts, accessory drive kits, V-belts, timing belts, Pro Series kits, Pro Series Plus kits and Black Series kits.
CRP, which has a strong presence in the aftermarket, said it will continue to sell other non-Continental brands, including Rein Automotive parts, Pentosin technical fluids, Ajusa gaskets and AAE Steering products.
In addition, CRP Mexico will operate as it has in the past, selling and marketing Conti-brand products as a master distributor, Continental said.
No production facilities or current employees are included in the purchase of the belt and belt kits unit, which will be fully integrated into the Fairlawn-based ContiTech North America business, according to Stefan Feder, head of sales and marketing for the automotive aftermarket import channel.
However, he said the firm is in the process of expanding its organization in North America to tie in with the purchase by adding product management, sales, demand planning and customer service personnel in order to continue serving its extended customer base at minimum with the same standards.
"CRP has been our long-term partner for the import and distribution of our Continental ContiTech branded belt products," Feder said. "In addition, CRP has also developed and launched the kit category in North America under the Continental ContiTech brand.
"CRP did not hold the Continental brand rights. The acquisition is about taking over CRP's strong role in the import channel for the assembly of Continental kits and for the distribution of Continental products."
Continental and CRP are working together on a gradual transition of the business to enable customers to become accustomed to the new arrangement of services and products. Financial terms of the acquisition were not disclosed.
There are two phases involved in the transition, according to Feder. First, ContiTech North America will build up its system to take orders directly, a process that should be completed by the end of 2019. The second phase involves using CRP for warehouse management and kit assembly, which should take another year to complete.
He said the kits include a combination of different products, such as a belt, pulley, tensioner and a water pump, along with screws and other items, if required for installation.
Continental has been making a concerted effort to expand its North American automotive aftermarket operation during the last decade.
Just 10 years ago, the firm's route to the North American aftermarket for its belting business was mostly limited through CRP, principally targeting import specialists, Feder said.
With the company's acquisition of Veyance Technologies Inc. (the former Goodyear technical rubber products business), Continental significantly increased its presence in the aftermarket, "with a strong position in the all-makes channel," he said.
Under the all-makes program, the company supplies the full range of spare parts for all makes and models in the region. It's one of three sales channels offered within the automotive aftermarket segment. The others are imports and retail.
Sudmann said in a statement that in addition to continuing to build its all-makes program, "this integration will help us to be one of the leading providers in the import market. This will bring clarity to branding for both Continental and CRP's customers.
"Combining the strengths of each business, we will ensure each of our customers will be provided a one-stop shopping experience."
Feder said the transaction also gives ContiTech North America the opportunity to further develop its retail program.
"Continental is looking back on a very strong increase in market share and brand awareness over the past years and we are very confident to further develop our position to stay and become the first choice for kits, belts and hoses in the North American aftermarket," he said.
Bringing CRP's Continental related belt and belt kit operation in-house moves the company "into the leading position for belts and kits in the import channel," according to Feder.
"Everyone at ContiTech North America is highly motivated to make Continental's belts and kits the first choice for our customers. The scale of the new business is now giving us the chance to do that in all three aftermarket sales channels," he said. The three channels include all-makes, imports and retail.
CRP CEO Dan Schildge said in a statement that Continental "has been a valued partner for more than 65 years, and a mutual respect and collaboration has been the foundation of our relationship during that time. We are proud to have built the Continental brand in the market."
He agreed with Sudmann that the transaction brings alignment to the Continental product lines but he also said it allows CRP "to focus on further defining our brand and product offering around solving the advancing technology challenges faced by today's repair technicians."
CRP believes the acquisition "is in the best interest of our customers, and we will do everything in our power to ensure that the transaction will run smoothly," Schildge said.