MAHLE Sees Automotive OE Business Staying Flat; Bets on Aftermarket, Non-Auto Growth

German automotive supplier MAHLE expects its original-equipment business to remain flat and is looking to the aftermarket, services and non-automotive applications for growth amid weak vehicle production in key markets and a slower-than-expected electric vehicle transition outside China.

“I think in the automotive original equipment business, it will be flat…growth will come from the Automotive Lifecycle and Mobility and from non-automotive,” Arnd Franz, Chairman of the Group Management Board and CEO of MAHLE, told Autocar Professional.

The strategy comes as MAHLE’s group revenue has declined for three consecutive years. At the same time, the company has improved its adjusted operating profit through cost controls, productivity gains and a restructuring of its business. 

MAHLE’s Lifecycle and Mobility business supplies parts, workshop equipment and services to distributors, repair shops, engine repairers and e-commerce companies. Its portfolio includes filtration and engine components, thermal-management and electronic parts, vehicle and battery diagnostics, emissions testing, air-conditioning servicing, technical support and training.

The division generated sales of €1.24 billion in 2025 and employed 2,008 people at the end of the year. It contributed about 11% of MAHLE’s group revenue of €11.26 billion. Reported sales from the business declined 4.3% during the year, but increased 1.7% after adjusting for currency effects, according to MAHLE’s 2025 annual report. 

The company is also transferring technologies developed for vehicles to data centres, stationary energy-storage systems and other industrial applications.

The company is developing cooling systems that take cooling closer to the source of heat generation in data centres, including computer chips. It plans to use its experience in automotive heat exchangers to develop more efficient systems for high-performance computing applications. 

Roger Busch, MAHLE’s Head of Sales and Technology, said the company was developing “totally new cooling concepts” for data centres and was in discussions with large-scale operators.

“We are using the knowledge that we have from the automobile field, where the efficiency of the heat exchanger was much higher than what you normally know from the refrigeration area or the normal industry business. We see real growth potential for us in data-centre cooling,” he said.

MAHLE Develops Cooling Unit for Infineon

MAHLE has also disclosed a project with semiconductor company Infineon. The supplier has developed a liquid-cooling unit for Infineon’s new EasyPACK S high-performance power module, which can be used to control power-supply systems in data centres.

The cooler is fitted directly to the circuit board and uses liquid coolant to remove heat from the power module. MAHLE delivered the first prototypes within four months, with Infineon now testing and validating them.

MAHLE said the system increased the module’s performance compared with its predecessors and could improve its durability.

MAHLE has consolidated its non-automotive operations under a new Industrial and Special Solutions unit within its group sales organisation. The company said this would allow it to target industrial customers, develop customised products faster and use its existing manufacturing 
capacity more effectively.

The supplier is also preparing to begin series production of a liquid-cooling module for stationary battery-storage systems in 2026. Such systems store power for electricity grids and renewable-energy applications.

The module offers up to 42 kW of cooling capacity and is designed to keep batteries within an ideal temperature range, supporting their service life and load management, according to MAHLE’s annual report.

Electrification Outlook Remains Uncertain

Electrification could provide another source of growth because MAHLE supplies more content per electric vehicle than it does per internal combustion engine vehicle. However, Franz said stronger competition and the slow ramp-up of EV volumes had made the outlook uncertain.

“Our vehicle content per electric vehicle is a lot higher than on internal combustion engine vehicles. And that’s true in light vehicles, and that’s true in trucks. But the competition is also higher. So, we’re not yet clear how this will all develop,” he said.

Franz said electric vehicle sales had fallen short of expectations in almost every market apart from China. Automakers have also continued to manufacture electric motors and, in some cases, power electronics internally.

This has left some of the capacity created by component suppliers underused.
“Most of the capacity that has been created with suppliers is not utilised,” Franz said. “The OEMs retain the production in-house and the suppliers cover the peaks, but there are no peaks in many cases.”

Franz said electrification could eventually become MAHLE’s third growth pillar, alongside Lifecycle and Mobility and non-automotive applications, but the timing and scale remain unclear.

MAHLE’s annual report expects battery-electric vehicles to account for about 45% of global passenger-vehicle production by 2035, up from around 16% in 2025. However, it expects internal combustion engines to retain a significant share in emerging markets.

Sales Decline, Adjusted EBIT Improves

MAHLE’s group revenue declined from €12.82 billion in 2023 to €11.68 billion in 2024 and €11.26 billion in 2025.

Earnings before interest, taxes, depreciation and amortisation increased from €917 million in 2023 to €964 million in 2024, before declining to €779 million in 2025.

Reported earnings before interest and tax increased from €304 million in 2023 to €423 million in 2024 but fell to €228 million in 2025. Consolidated net income declined from €26 million in 2023 to €22 million in 2024 and €20 million last year.

However, adjusted EBIT, which excludes special items, improved from €325 million in 2023 to €347 million in 2024 and €442 million in 2025. This indicated an improvement in the underlying business despite lower sales.

MAHLE said US trade tariffs, geopolitical tensions and regulatory uncertainty weighed on the automotive industry during 2025. Vehicle production also declined in Europe and North America, two of its largest markets, reducing customer demand.

Regional Performance Remains Uneven

Europe remained MAHLE’s largest market in 2025, but sales in the region declined 5.4% to about €5.1 billion. North American revenue fell 2.8% to around €3 billion, though it increased after adjusting for currency and consolidation effects.

Sales in South America declined marginally on a reported basis to €816 million but rose by more than 10% after adjustment. China revenue fell 7.5% to around €1 billion, while East Asian sales declined 1% to €836 million.

India was MAHLE’s fastest-growing region. Sales in the country increased by more than 10% to €455 million and by over 20% after adjusting for currency movements. Its share of group revenue rose to 4% from 3% in 2024, according to the company’s 2025 annual report.

Global Vehicle Output Led by China and India

The global original-equipment market grew in 2025, but the expansion was concentrated in China and emerging markets.

Global production of passenger cars and light commercial vehicles increased by about 4% to more than 93 million units. Production rose 10% in China and 8% in India. South America recorded growth of 3% and East Asia expanded 1%. Europe and North America each declined 1%.

Global production of medium and heavy commercial vehicles also grew by around 4%. China’s output increased 25%, while production in India rose 11%. In contrast, North America recorded a 25% decline, South America fell 8% and Europe contracted 6%. East Asian production remained broadly unchanged.

The fall in vehicle production in Europe and North America weighed on MAHLE because the two regions remain among its largest markets.

India Sales Targeted to Double

Against the weak outlook in some developed markets, MAHLE expects India to remain a key source of growth and plans to double its sales in the country over the next five years.

Franz said India had moved beyond the “stop-and-go” pattern of progress the company had experienced in the past.

“Some dreams about technology, exports, market share, efficiency and productivity that we may have had in the past, with successes and moments of disappointment, have changed into a consistent pattern of progress and growth that seems to be sustainable,” he said.

“We are famous for our conservatism and modesty, but we are bullish on India,” Franz added.

“We expect to double our sales in India in the next five years,” Busch said. Based on the company’s 2025 revenue, achieving the target would take MAHLE’s annual India sales to close to €1 billion.

To support this growth, MAHLE is looking to expand its India portfolio across electrification, thermal management and the aftermarket. The company is evaluating the introduction of its MCT electric motor, which does not use heavy rare-earth magnets, with Franz describing it as a priority product for India, though no launch timeline has been disclosed.

India is also being considered as an early market for MAHLE’s AI-supported cabin climate technology. In the aftermarket, the supplier plans to introduce a wider range of workshop and battery-service solutions, including diagnostic scanners, air-conditioning and coolant-service equipment, battery health checks and tools that help determine whether used batteries should be repaired, repurposed for stationary storage or recycled. These products are expected to be offered to automakers as well as independent workshops.