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Clutch Market: Passenger Car And Light Truck Clutches

By Larry Carley

Optimism isn't exactly running high these days among clutch rebuilders and their component parts suppliers, particularly with respect to passenger car and light truck clutches. The market is being squeezed on one side by an influx of new clutches from offshore suppliers, and on the other side by price pressures and too much competition. You might say it's a gripping story about a market that has been slipping away from traditional clutch rebuilders for the past several years.

On the heavy-duty side, the situation is more engaging. The level of remanufacturing activity remains high as demand overall for reman clutches has been holding steady. Profits are still reasonably good in heavy-duty clutches (much more so than passenger car and light truck), and some are finding new opportunities in niches such as the agricultural clutch market.

Industry chatter has it that some major changes and consolidations are underway. At least one major clutch remanufacturer is reportedly up for sale by its parent company. Another has seen its clutch business spiral down, down, down, according to sources outside the company. Rayloc announced the closing of its Atlanta clutch facility as part of a consolidation that shifts clutch remanufacturing to its Stevenville, TX, plant. Rayloc also remanufactures clutches at its Payson, UT, facility.

"Most of the big rebuilders of passenger car clutches have folded," said Bill Russell of Russell Auto Parts, a core supplier in Boerne, TX. "I've been supplying clutch cores since 1948 and this is the worst I've ever seen it. Most of the people who have supplied clutch cores have gotten out of the business. Including ourselves, there's only three major suppliers left."

Russell blamed the demise of the passenger car clutch market on the glut of new clutches that have been pouring into the U.S. from offshore manufacturers. He said too many rebuilders have gotten away from the basics that built their businesses, by selling new clutches instead of remanufacturing them. "They fired all their buyers and went to computers," explained Russell. "A lot of those companies are now out of business.

"There will always be a need for clutch rebuilding, especially on the older applications and agricultural applications because nobody wants to make new clutches for cars or tractors that are more than 10 years old," said Russell. "But rebuilders have to get back to the basics of rebuilding if they're going to turn things around."

Michael Tell at Marvin Tell Company, Trafford, PA, blamed the current situation in the clutch market on consumers who are buying low priced new clutches instead of reman clutches, and not enough rebuilders who are aggressively promoting the advantages of reman versus new clutches.

"A lot of rebuilders initially bought new clutches to fill holes in their inventories because cores were not available," explained Tell. "But now the manufacturers they were buying new clutches from are selling direct to their customers.

"Rebuilders need to go out and sell themselves and the benefits of remanufacturing. They're certainly capable of doing a superior job on automotive clutches no matter how tough a clutch is to rebuild. So I'd like to see rebuilders do what they do best, and compete on quality," said Tell.

Third world clutches

Luk and Valeo are the major suppliers of new OEM and replacement passenger car clutches in the U.S. Even so, offshore manufacturers in China, Korea and India are exporting a growing volume of new clutches into the North American market.

"The problem," said Chris Jackson of AMS Distributing, a component parts supplier in Fenton, MO, "is that there's an over capacity in new clutch manufacturing worldwide. Everybody wants to sell here (U.S.). They all think that North America is this huge untapped market. But the supply has exceeded demand and depressed prices.

"What a lot of consumers don't realize is that many of these new clutches from Third World countries are not from OEM manufacturers. Most people think a new clutch means one produced by an OEM manufacturer. But many of the new clutches that are being sold are Third World clutches of inferior quality.

"Some of the major retailers and rebuilders who have been selling these clutches are reconsidering their quality, and are realizing that a remanufactured OEM (quality) clutch is usually better."

Jackson said he thinks small- and medium-sized rebuilders who have their ears close to the market are in a good position to respond to the challenge created by the influx of Third World clutches. "The opportunity is to go out and sell quality," he said.

Eddie Thomas of Pioneer, Inc., a component parts supplier in Meridian, KS, thinks rebuilding passenger car clutches may yet make a comeback. "There are a lot of cores out there, but prices haven't come down much. When prices do come down, I think we'll see movement back towards rebuilding."Thomas said a large percentage of Pioneer's sales are still passenger car and light truck clutch components, but that the company is shifting its focus more to the heavy-duty and agricultural markets.

New or reman?

The level of rebuilding activity in passenger car clutch discs has also declined sharply. "It only makes sense if you can't get a new disc," said Albert Cohen of Carfel, Inc., Miami, FL, a supplier of new clutch discs.

Cohen said changes in clutch disc designs, such as dampened hubs and double dampening springs, has made it more costly as well as difficult to rebuild discs. Consequently, he says, most rebuilders buy new discs rather than rebuild them.

"With the labor cost to replace a clutch in a front-wheel drive car being so high, many consumers don't want to take a chance on a reman disc and insist on a new clutch and disc. When the cost difference is only 10 bucks, most people will go with new."

Cohen said that a lot of jobbers and retailers would rather sell new clutches and discs with no exchange because it eliminates core hassles. "Nobody likes to handle cores because of the mess, credit procedures, paperwork and shipping," he offered.

New designs

Stan Strzalkowski, director of aftermarket products for Valeo in Livonia, MI, said General Motors changed to a new style of "concentric bearing" clutch on all of its pickup trucks in 1996. The clutch has a different lever height and is not interchangeable with previous designs. Consequently, the new design will have an impact on the high volume clutch numbers as time goes on.

"Most of the demand for replacement clutches is for pickup trucks; it won't take long for this change to be felt in the aftermarket," said Strzalkowski. He said most major retailers have new clutch programs.

"Everybody is buying kits these days because a kit that includes the cover, disc and bearing eliminates a lot of confusion and the risk of mismatching parts," said Strzalkowski. "It means more SKUs for jobbers and warehouse distributors, but the benefits outweigh the added numbers." He said NAPA also has a reman kit program in place, and that rebuilders should consider the advantages of offering their reman clutches in kits to their customers.

Heavy-duty

Most of the rebuilders we interviewed for this article told us that the heavy-duty market is still relatively healthy. About 70% of the OEM market is still Spicer, though Rockwell has captured about 28% of the OEM business. Valeo has been making a "stab" at the OEM market, but has only captured a few percentage points up to this point in time.

According to several sources, most rebuilders do not rebuild Rockwell clutches, but replace them with Spicer units. "About 90% of our business is rebuilding heavy-duty clutches," said Tony Lato of Unique Automotive Rebuilders, Inc., Jonesburg, MO. "Spicer is our main bread and butter. But the conventional angle spring clutch is phasing out and is being replaced with the Easy Pedal clutch. The older cores are starting to fade out. A lot of people are resisting the change, but it's inevitable."

Lato says another change he's seeing is the entry of more Class 6 and 7 foreign trucks into the market. "Parts are not available for most of these, and disc parts are impossible to find," said Lato. "But we've got a lot of cores and can usually get what we need."

Ron Charnes of A.C.C. Rebuilders in Memphis, TN, also rebuilds primarily heavy-duty and industrial clutches. "We're seeing more and more changes all the time," said Charnes. "I think the OEMs are trying to put us rebuilders out of business. Valeo and Rockford won't sell (replacement) component parts, and Spicer is trying to get it so the aftermarket can't make parts for its new clutches. If we can't get the parts we need to remanufacture clutches, we can't stay in business."

Richard Finley of Brake & Clutch Supply in Waco, TX, says his six-man shop does about $500,000 in clutch sales annually, about three-fourths of which is for agricultural applications. The rest is mostly one-ton and up trucks, but also some passenger cars. "We do whatever comes in the door," he explained.

Finley said his biggest problem is with other rebuilders who do "patch jobs" instead of a complete rebuild and then sell at "dirt cheap" prices. "Some of these guys just clean up the clutch and repack the bearings. Or they weld up the housing or cover and don't do much else. But the buyer soon learns they get what they pay for.

"When we do a clutch, we do a complete rebuild and install a lot of new parts. We put in new bearings, retainers, housings, springs and bushings. We'll reuse the cover and sleeves if they're okay, and the plate if it cleans up. When we're done, it's as good or better than new."

Finley said he's recently started rebuilding Mack clutches as well as brake boosters and CV joints. But he says the CV market is too cutthroat, so he may get out of it.

"It's really getting harder to get parts for some clutches, especially the import passenger car clutches," continued Finley. "Luk and Valeo only want to sell new clutches, and they want a core back when they sell a new clutch to keep the cores out of the hands of rebuilders. Sometimes we'll keep the core and pay the core charge so we can have the core for parts," he said.

Joe Gears at Toledo and Brake in Toledo, OH, said his company does primarily heavy-duty and "specialty" clutches (agricultural, off-road and classic car). Four employees turn out about 250 clutches each month. Business has been steady, he reports, even though Dana has captured a lot of market share in the Toledo area with its own reman program.

He credits his success to efforts that have been made to go out and sell local fleet accounts. "We do a good job marketing in about a 50-mile radius," said Gears. "We build a quality clutch and that's what our customers want."

Dave Bortz, president of Tribco, Inc., Cleveland OH, a supplier of component parts and friction material for heavy-duty, street performance and racing clutches, said quality is something every rebuilder should sell. "The friction material is usually the weak link in a heavy-duty clutch," said Bortz. "Poor OEM designs continue to generate an aftermarket for clutches, especially in some applications such as the 550 hp Caterpillar engines."

Bortz said his company will soon be granted a patent on its procedure for manufacturing friction material. The process, which allows the use of 100% Kevlar fiber and a high temperature resin developed by NASA for reentry vehicles, yields a friction material that can outlast sintered bronze by four times, and organic linings five to six times. It's a more expensive material, but can provide the higher level of quality that is necessary for performance applications as well as heavy-duty (For a complete listing of friction material suppliers to the clutch rebuilding industry see our January Purchasing Directory issue, editor's note).