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Ryco Filters pushing ahead in face of BEVs

Wait and see: The battery-electric Hyundai Kona Electric (left) and Jaguar I-Pace (below) may have launched in Australia recently, but Ryco Filters is not looking to shift away from its core business in the short term.

Electrification not a short-term concern as Ryco Filters looks towards new products

General News logo8 Apr 2019

AUSTRALIAN automotive aftermarket company Ryco Filters says it is looking to “differentiate through innovation” as battery-electric vehicles (BEVs) edge closer to mass adoption – a seemingly inevitable industry trend that threatens its core filtration business.
 
Speaking last week at the Australian Auto Aftermarket Expo in Melbourne, Ryco Group executive general manager of Ryco Filters Amy Frangos said the company is constantly considering what its long-term future looks like.
 
“Obviously, we’ve got this history with service parts. It’s been great business, because there’s all these filters and they get serviced every year, or twice a year if we’re lucky,” she said.
 
“Rather than getting ahead of ourselves and going, ‘EVs: They’re going to be here at this point in time. Let’s start embracing some kind of electric-based technology’, what we’re doing is, bit by bit, exploring ways that we can differentiate through innovation.
 
“One of the first things that we’re doing is going, ‘Okay, while we continue to deliver these service parts, how can we find things that are adjacent to us, which actually require a bit more of a technical expertise?’
 
“And then each year, as we do more and more of that differentiation, we perceive that there’ll be this emergent strategy there, where we’ve been able to move away from something that’s so dependent on an internal-combustion engine and move into something that’s actually required a lot of the engineering and innovation expertise that we have.”
 
Asked if Ryco Filters is finding its options for future products more limited, given the vast difference in average number of parts between an internal-combustion engine and a battery-electric powertrain, Ms Frangos said that will not be a concern for a while.
 
“We’re not even there yet,” she said. “Like I said, we’re monitoring that as something that’s progressing, but the aftermarket, especially, is a good three to five years behind whatever’s happening in the main market, so we do have a point there will be this point of change and then it will feed through to our part of the industry a bit later.
 
“While it’s something that we’re very aware of, it’s a big concern of ours because we know that we have the technical capabilities and also the market connection to be able to get ourselves out of just relying on this, our historical core business.”
 
Ms Frangos said parent company GUD Holdings, which also owns fellow automotive aftermarket companies Wesfil, Goss, Narva and Projecta, is also across the industry developments to ensure that its overall business remains strong.
 
“There is no need for the panic button, essentially,” she said. “One of the main things we do from a GUD perspective is keep our finger on the pulse of all of those changes.
 
“We have an innovation council that meets every two months to look at the progress of these trends. At no point have we decided that we need to panic.”
 
Ms Frangos added that Ryco Filters already has several innovative products under development that “won’t be so dependent on our main business”, although it typically only looks ahead one to three years.
 
“We don’t necessarily consider ourselves a filtration business,” she said. “We consider our business as a business and a brand that’s primarily focused on serving mechanics and fitters.
 
“Even right now, we don’t just do filters. We do service tools, for example. So, there’s lots of things that we consider adjacent to us that don’t necessarily fit in a filtration category.
 
“I personally (disagree with) the idea that just because we’ve historically been in filters, that we’re a filter business. What we’ve historically been in is helping mechanics (and) helping them service their customer’s vehicle in the very best way.
 
“So, any time that we’re still doing that, we’re still being true to our brand and our business. It’s just going to be a process of finding out how to do that better, stronger and in different ways as the car parc changes.”
 
Asked if the longer service intervals of BEVs will have a negative impact on demand for Ryco products, Ms Frangos said that “potentially” could be the case.
 
“I think what it probably does is shifts (business),” she said. “We look at things like the emergence of fleets (and) what we see is as electric vehicles become more and more popular.
 
“The critical part will be the fact that they’ll probably all form part of bigger fleets, because there’ll be this critical mass where electric vehicles and autonomous vehicles are all kind of linked in together as one big force of change.
 
“The majority of our customers are individual workshops, so how do we make sure we’re linked to fleets and linked to this changing nature of the ownership of vehicles?
 
“But again, it’s something that we’re very aware of and we’re certainly monitoring, but at this point in time, we’re not at that critical point where we need to actually throw out what we already do and start doing something different.
 
“From a GUD level, and from each individual business level including Ryco, we’re continually making sure that we’re connected into the market, the market overseas and our customers. That gives me confidence that we’ll be able to react pretty nimbly to whatever happens.
 
“As much as we’re quite an impactful business, we’re still a medium-sized business. There’s 75 people in Ryco Filters and that enables us to react relatively quickly.”
 
Ms Frangos said autonomous vehicles also represent a future business opportunity for not only Ryco Filters, but GUD Holdings as a whole.
 
“It’s certainly part of things that we’re testing, but the thing we don’t want to do is embrace a technology just for the sake of it,” she said. “We just want to make sure that it’s actually based on a customer need.
 
“We’ll be part of it, but to say autonomy and electrification (are) something that we (have) actively front-of-mind right now, it’s back of mind.”

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