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Mahle is an automotive parts manufacturer with nearly 80.000 employees and global sales of $13.7 billion. It is privately held and located in Stuttgart, the heartland of Germany's automotive industry. It is organized into five business units, Engine Systems and Components, Filtration and Engine Peripherals, Thermal Management, Electronics and Mechatronics and Aftermarket Parts. Electronics and Mechatronics includes both systems for combustion engines and electronic vehicles. Company sales have been stable, if stagnant, at the current level, while profitability has increased significantly over the previous years. According to the company, its main focus is on the continued improvement of combustion engines while developing products for electromobility.


  • The company is an established global player with a 100-year history.
  • The company has managed to improve both operating (from 1.9% of revenue in 2016 to 4.9% in 2018) and net income (from 0.5% of sales to 3.7% from 2016 to 2018), despite flat sales in recent years.
  • The company has recognized the need to strengthen its position in new technologies and is actively pursuing that under its Dual Group Strategy.


  • Outside of electromobility, the market for the company's products is fairly stagnant outside of China and parts of Latin America.
  • The positive trend in earnings was broken in H1 2019 (full year figures are not yet available), due to higher raw materials costs, new duties imposed by the US and decreased sales, demonstrating that Mahle is quite exposed to changes in the environment for global trade.
  • The company itself, in its H1, 2019 investor call, refers to its product mix as unattractive. This refers to its continued focus on technologies and products related to combustion engines.
  • As a privately held company, Mahle has less access to capital than a similar, publicly traded firm. A significant portion of the company's liabilities is in maturities of less than a year.
  • Mahle is not involved in alternative mobility concepts outside electric cars and bicycles. If fuel cell technology becomes commercially viable (see the Toyota Mirai, for example), Mahle's capability in that segment would be limited to parts these cars share with regular combustion engine models.
  • Mechatronics, a division of the company with significant potential for future growth, currently only accounts for 3.6% of global sales.


  • As European car manufacturers like BMW and Volkswagen continue their push into electromobility, increased opportunities should present themselves for Mahle to expand into that market.
  • If the global trade environment improves, Mahle should be able to fund the technological diversification of its business through its own cash flow. However, this would require the reversal of tariffs currently in place that negatively affect the company's bottom line.
  • Certain components of cars remain largely unchanged, regardless of what type of engine they use. The markets for mobility in South America and parts of Asia are not yet saturated and will continue to grow as wealth and population sizes increase. Mahle's Thermal Management and Electronics and Mechatronics divisions should be able to capitalize on these trends.
  • Thermal Management, accounting for over one third of the company's global sales, will remain relevant with electric mobility and offer opportunities for growth while Mechatronics, currently accounting for under 4% of sales offers significant opportunities for future growth.


  • In a world increasingly dominated by trade disputes and tariffs, Mahle's growth and profitability appear highly dependent upon a political environment favoring free trade which, currently, is not assured.
  • The company's clients are mainly large, integrated global players and who are exposed to some of the same geopolitical and trade policy risks as Mahle itself.
  • A continued push into electromobility, a highly competitive marketplace, will require access to capital, which may prove difficult for a privately held company whose profit margins are under threat by geopolitical developments.
  • It appears that, by its own admission, Mahle is somewhat behind in electromobility. Whether acquisitions like that of Ebikemotion, a manufacturer of motors for e-bikes are sufficient to position the company for the mobility markets of the future, remains to be seen.
  • There is a widespread push by European governments to phase out the sale of combustion engine vehicles, with timelines varying between 2025 in Norway and 2050 in the UK. Unless Mahle is successful in adapting its product mix, it will become more reliant on other parts of the world and face increased exposure to geopolitical and tariff risks.
  • Given the short term nature of much of the company's funding, it is exposed to adverse credit events and market risk.