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How we create value

One way of better understanding what affects Haldex’s sales and profitability is to break down both revenues and expenses to see how the operations are structured. At the same time, Haldex’s costs are a way of returning value to employees, suppliers and shareholders.

Business model and profitability

Truck, Trailer and Aftermarket

The largest portion of Haldex’s sales (45 percent) consist of sales to the aftermarket. However, these sales could not be made if a large number of vehicles were not manufactured with Haldex products installed on them from the outset. Volumes are built up by signing large-scale contracts with OEM’s (Original Equipment Manufacturers, that is, manufacturers of trucks and trailers). These contracts are subject to intense price pressure from experienced purchasing organizations, since the volumes procured are sizable. OEM sales can, in turn, be divided between truck manufacturers, who account for 23 percent of sales and trailer manufacturers, who account for 32 percent of total sales. Truck manufacturers generally sign larger contracts than trailer customers. On the other hand, trailer customers have shorter lead times from projects being initiated to the commencement of production, so aftermarket sales start sooner than with larger contracts signed with truck manufacturers.

Aftermarket sales generally have higher margins than OEM sales. For distributors owned by OEMs – known as OESs (Original Equipment Supplier) – contracts are, in many cases, linked to those signed with the OEM customer. See also the business model on page 7.


Products in a start-up phase incur higher fixed costs than those that have been on the market for a long time. For Haldex, this means, in the current situation, that brake adjusters have a higher margin than disc brakes, although the difference is expected to even out as disc brake volumes rise and aftermarket sales get underway. Since disc brakes are most common in Europe, this region’s profitability is lower than that of North America where drum brakes (of which brake adjusters are a part) are still most common.


Direct materials

Haldex's largest cost item consists of direct materials, which account for more than half of the Group's costs. Consequently, a saving of 1 percent on material costs has a considerable impact on Haldex. Direct materials are considered to be a variable cost.

With a total of about 850 suppliers globally, many job opportunities are generated among suppliers.


Personnel costs account for about a fifth of the Group’s costs and are considered to be partly fixed costs and partly variable costs. About 40 percent of employees are white-collar workers, while 60 percent work in production. Our largest manufacturing facilities are located in Mexico, Sweden, China and Hungary. Our Code of Conduct ensures that working conditions are good in all of the 18 countries where we operate. We also invest some SEK 150 m in R&D, which primarily involves personnel costs, corresponding to 3.5 percent of sales.

Fixed costs

Haldex’s other costs involve investments in machinery, rental costs, property maintenance, depreciation and financial costs. Including fixed personnel costs, fixed costs represent approximately one-fourth of total costs.

Value creation

Another way of breaking down costs is to look at who is the recipient. For our employees, we create value by offering jobs. Our purchasing from suppliers creates jobs, often in developing countries that need them most. Social security contributions, pensions and taxes are paid to the community. Haldex does not pursue aggressive tax planning and does not locate subsidiaries in tax havens. Finally, we have shareholders, for whom we create value through dividends. In addition, some of the company’s profits are reinvested to generate long-term value for Haldex as a whole.