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The separation of SKF’s automotive business into a standalone company, SKF Vertevo, is one of the most closely watched restructurings in the bearing industry in recent years. With shareholders approving the split on 1 October 2026 and the new company set to begin life on its own on 1 December, the move goes beyond a change of name and ownership. It reflects the pressures reshaping the automotive supply chain, from intense price competition with car makers and the shift to electric vehicles to the rise of Chinese manufacturers and rapid consolidation across the sector.

In this article, written from a distributor’s perspective, Hassanein Alwan, Board member at WorldPTA, shares his personal view on the split, drawing on public figures and his years as SKF’s distributor in the Middle East. He looks at why SKF chose to let its “younger brother” move out, what it really takes to build a standalone company, whether the SKF name will stay on the door, and what the change means for distributors, workshops, aftermarket buyers and investors.

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Tuesday, 17 September 2024. I walked into SKF’s headquarters in Gothenburg on an official visit as SKF’s distributor in the Middle East.

I was there to meet people. Visiting SKF is always exciting, but this visit was special. It was my first time back since the head office had been rebuilt and expanded.

Over lunch in the SKF Group canteen, one topic moved from table to table. That day, SKF had announced it would separate its automotive business. We talked about little else. Honestly, it was a shock.

I can’t remember what was on my plate. I remember what was on everyone’s mind.

The photo at the top of this article was taken that day.

The family had just announced that the younger brother was moving out.

I have worked with SKF for many years, as I have with many other brands. So since that day, industry peers and colleagues in our own company have kept asking me the same two questions: “Hassanein, what will happen to SKF Automotive? What is the future of this new company?”

What follows is my own view, built on public numbers and what I see in the market.

Two years later, part of the answer is in. On 1 October 2026, SKF’s shareholders approved the split. On 1 December, the younger brother leaves home.

His name is SKF Vertevo.

And moving out is always harder than it looks.

Living in the Big Brother’s Shadow

SKF is almost synonymous with bearings. When people in our industry think of bearings, they think of SKF. That connection was built over more than a century of dedication, innovation, and being one of the first pioneers in the industry.

The company grew its industrial business to serve almost every industry. It was also very successful in automotive, supplying bearings to the world’s leading car makers.

But in the SKF family, Automotive was always the younger brother. Always part of the portfolio, never the shining star. The industrial business was bigger and more profitable, so the whole structure of SKF was built around the industrial strategy.

The numbers show it.

Automotive has always been less than 30% of SKF’s sales. In 2023, it brought in SEK 30 billion at an adjusted operating margin of 5.6%. Industrial brought in SEK 73 billion at 15.4%.

The profit gap is even wider. In the twelve months to June 2026, Automotive made about a quarter of SKF’s sales, but only 8% of its adjusted operating profit.

Same family name. Very different economics.

Why the Split?

For many years, the automotive business has been under pressure from car manufacturers. Car makers always had many suppliers to choose from. Competition was severe and profitability was low. OEM business has always been competitive, and always will be.

Now, back to SKF.

Close to two-thirds of SKF’s automotive sales go to car and truck makers.

The other third is the vehicle aftermarket: the spare parts that keep cars on the road long after they leave the factory. This is the steadier part of the business. Car production goes up and down, but cars on the road still need repairs.

Yet the aftermarket never became SKF’s real strength, at least not in my part of the world.

In the market, SKF is known for industrial bearings, and that is where its profit comes from.

As a distributor, I found SKF automotive much harder to build. SKF did not even hold automotive stock for the Middle East and Africa. Orders had to come from Europe.

The reason is the car parc. Our roads are full of Japanese and Korean cars, while SKF’s automotive strength is in European cars. In Saudi Arabia, the region’s largest car market, Toyota, Hyundai and Kia alone took more than half of all new car sales in 2025.

SKF is also strong in kits: one box with the bearing and every other part the mechanic needs for the job. In our region, kits never caught on the same way. And competitors with stronger aftermarket networks kept the price pressure on.

Then the industry itself started shifting gears. The market began moving from the traditional engine to electric. New EV makers entered with low-cost cars. Traditional car makers struggled with the speed of the change, and their suppliers lost the bulk volumes that had fuelled the business.

An electric car has fewer moving parts. It needs fewer bearings.

To be fair, SKF argues the picture is more nuanced. The bearings that disappear are mostly the simpler types, and EV bearings sell at a higher price because they must meet tougher specifications. Fewer bearings per car, but the ones that remain are worth more. Both can be true.

My view is that electrification still moved much of the new value away from traditional bearing makers, towards companies that supply the other parts an EV needs.

Many of the new EV makers are Chinese. SKF says it holds a strong position with Chinese car makers too.

My view is different. As Chinese car makers expand around the world, they will bring the Chinese bearing industry with them, just as the Japanese car makers once brought their own suppliers. That does not mean SKF Vertevo cannot win there. With real focus, it can win some business. But I do not see it taking a big share.

Squeezed by car makers on price, reshaped by electric motors, and challenged by new rivals. The board’s conclusion was simple: two businesses that need different things will do better apart.

And the big brother gets fitter too. Without automotive, SKF becomes a pure industrial company, and it has set itself a long-term target of an adjusted operating margin above 19%. Less weight to carry, and a higher bar to clear.

Moving Out Is Harder Than It Looks

On paper, splitting a company sounds easy. Draw a line, give the automotive side its own name, let it focus on its market, and the business will grow.

In reality, it is not that easy.

When the split was announced, SKF Automotive did not stand on its own. Offices, warehouses, IT systems and support functions were shared with the industrial side. Many people working on automotive were shared staff.

Moving out meant building or moving all of it in about two years. And not in one country, but globally and on many levels: logistics, marketing, IT, sales, finance. New legal companies in every country. Production lines physically moved from one factory to another.

Look at what the younger brother is taking with him: about 7,500 people, 16 factories, more than 20 offices and 10 technical centres.

It has not been cheap. In 2025 alone, separation costs were around SEK 1 billion.

And the moving date slipped. In 2024, SKF aimed to list the business in the first half of 2026. In January 2026, it pushed that to the fourth quarter, so it could transfer more production lines first.

Even now, the dust is still settling. For a while, the big brother will keep making some of the younger brother’s products under contract.

You can sign the papers in a day. Making a new house a home takes years.

What’s in a Name?

Every brother who leaves home needs his own name on the door.

On 26 February 2026, SKF announced the new company’s name: SKF Vertevo. “Vertere” is Latin for “to turn” or “to transform”, and “evo” is short for evolution. A name all about change.

But notice what they kept. SKF.

Compare that with another Swedish split. When Atlas Copco spun off its mining business, the new company got a completely new name: Epiroc, chosen from almost 1,000 options. There was no Atlas Copco on the door.

SKF made the opposite choice, and it says why. It expects the SKF name to remain important for customer trust, market access and sales. In the aftermarket, where a mechanic picks a box off a shelf, a name customers already trust is worth a lot.

Could SKF disappear from the door?

I would not be surprised if, over the years, the SKF name disappears and only Vertevo remains. It could take ten years. And the most likely trigger, in my view, is a sale.

Here is why that is a real possibility. Once SKF Vertevo is listed, anyone can buy its shares. It will be a mid-sized automotive supplier, with around SEK 24 billion in sales and margins still below its target. In an industry where car makers squeeze every supplier on price, scale matters. And our industry is consolidating fast. This year, NSK and NTN, two century-old Japanese rivals, announced they would merge.

We have seen this film before, very recently. In 2021, Continental spun off its powertrain business as Vitesco Technologies, giving shareholders one Vitesco share for every five Continental shares. That is the same ratio SKF is using for Vertevo. Three years later, Vitesco merged into Schaeffler, and today the business operates under one brand: Schaeffler. The Vitesco name is gone.

To be fair, that was not a stranger walking in. The Schaeffler family was already Continental’s largest shareholder. And a buyer may even want to keep the SKF name for a while, because in the aftermarket, trust sells. But in the long run, no competitor wants to pay for another company’s name on its own door.

Today, nothing points to a sale. SKF’s plan is to keep the name. But plans are made for the road you see, and this road is long.

What It Means for Distribution

For distributors, a brother moving out is not just news. It lands on our desks.

I expect a lot of disruption in supply during the move. Systems are changing and warehouses are moving, and that usually means delivery delays. The signs are already there. In the second quarter of 2026, SKF’s cash flow was hit by stock building up because of the separation.

From where I sit, the changes are real. New people joined SKF Automotive. A new SAP system came in. We have seen delays in shipping, delays in order intake, delays in finding solutions, and some price changes. With so many things changing at once, doing business gets harder.

None of this is surprising. You cannot move house without the boxes getting mixed up for a while.

Distributors like us, who carried both SKF industrial and automotive under one relationship, now have to understand the split. Who do we talk to? Which agreement covers what? Do terms, targets and stock commitments change?

On paper, the younger brother leaves home with a big network. SKF says Vertevo’s aftermarket serves more than 10,000 distributors, workshops and fleet operators. But a long list is not the same as the right network.

Many of SKF’s partners were built around the industrial business. Automotive was the smaller line, and for some it was very small. For those distributors, a small line from a separate company, with its own systems, contacts and targets, may simply not be worth the effort. Some will choose to stay with industrial and let automotive go.

So my view is that Vertevo will have to build many new distributors, especially in markets where automotive was never SKF’s strength. The goal is not the most partners. It is the right ones: distributors who live in the automotive aftermarket every day, know the local car parc, and see Vertevo as a main line, not a side product.

The product range will change too. Vertevo is already moving beyond bearings, into brakes, steering and suspension parts. New products for the new car market will follow over time.

Living Alone Costs More

Anyone who has left home knows the first lesson. Living alone costs more.

SKF Vertevo was born from market change and the demand for better profitability. SKF has set it a clear goal: an adjusted operating margin in the high single digits. Today it is far from there. On its own accounts, the margin was 3.7% in 2025 and 5.5% in the first half of 2026.

And the full bill has not arrived yet. Many standalone costs only began this year. SKF Vertevo expects 2027 to be the first full year in which these costs are fully reflected in its results. There will be no big brother to absorb a weak quarter.

So how will it close the gap? My view is that it will do what any company under profit pressure does. It will raise prices where it can. It will move some production to lower-cost countries. And it will remove product ranges that don’t make money.

At the same time, it has to invest. To serve the new car market, Vertevo will need new ranges for electric vehicles.

To be fair, it does not start empty-handed. SKF is putting in around SEK 5 billion before the listing, so Vertevo starts life with zero net debt. A clean start. But a clean start is not the same as a profitable one.

What This Means for You

If you are a distributor: expect two companies, two systems and two sets of contacts. Plan for longer lead times on automotive lines during the transition. Check prices before you commit to long-term quotes. And get to know the new people early, because the relationships you build now will shape the next ten years.

If you are a workshop or aftermarket buyer: the product on the shelf stays the same, but availability may wobble for a while. Watch for new categories too, such as brakes, steering and suspension.

If you are watching as an investor, or from outside the industry: watch the gap between today’s margin of around 5% and the high single-digit target, especially in 2027, when the full standalone costs arrive. The next signal comes on 17 November, at SKF Vertevo’s first Capital Markets Day.

And for anyone in business: two businesses that need different things will usually do better apart. But splitting them is only the beginning, and perhaps the easiest part.

Not the First Time

This is not the first car business SKF has sent out into the world.

In 1926, SKF founded a car company as a subsidiary. A year later, its first car rolled out on SKF bearings. In 1935, SKF let it go.

Its name was Volvo.

Volvo grew up without the SKF name on the door.

Now it is SKF Vertevo’s turn.

Separation is the easy part.

Execution is the hard one.

The younger brother who grew up in the shadow will need time to become the company it needs to be.

The road is long, and it is rough.

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