The launch of the Corteco aftermarket unit capitalizes on the company's purchase of Detroit Gasket and its entry to the engine-sealing aftermarket two years ago. Now the Detroit Gasket product lines will be phased out, and original equipment-quality engine cylinder head gaskets, seals and rebuild kits will be introduced under the CorTec name.
Freudenberg-NOK executives are betting the brand strategy will steer the company's aftermarket business from commodity prices to a new premium price point and higher profits.
"It's our opinion that the retail market margins have eroded," said Joe Day, Freudenberg-NOK chairman. "This is an attempt to bring a new value point into (the business)."
As one example, the company is launching a line of white gaskets, meant to draw attention to leaks or weaknesses. The color demonstrates the confidence that company leaders have in CorTec gasket technology, and customers are likely to pay more for that security, Day said. He wouldn't talk about the higher price point at which Corteco initially will sell the products, but he did say the premium might fluctuate depending on market reaction.
The profits, though unspecified, will feed back into the original equipment side of the business, too.
"The aftermarket business margins allow many of us in the industry to continue to service the OE community," Day said.
In addition to the CorTec line, Corteco will sell other original equipment-quality products including:
The Corteco name will be used across the global aftermarket business of the Freudenberg and NOK Group companies, which have worldwide automotive sales of about $4 billion. Freudenberg-NOK is the North American arm of those companies. The aftermarket business represents 20 percent to 25 percent, or about $200 million, of Freudenberg-NOK's annual revenue, Day said.
Freudenberg-NOK executive Gregory Gyllstrom has been named CEO of the Corteco business unit.