Garrett Motion Inc. (GTX): Business Model Canvas [10-2024 Updated]

Garrett Motion Inc. (GTX) stands at the forefront of automotive innovation, leveraging its expertise in turbocharging technologies to deliver high-performance solutions that enhance fuel efficiency and adapt to the evolving needs of the industry. This blog post delves into the Business Model Canvas of Garrett Motion, exploring its key partnerships, activities, resources, and value propositions that position the company as a leader in both traditional and emerging markets. Discover how Garrett Motion drives its success through strategic collaborations and cutting-edge technology.

Garrett Motion Inc. (GTX) - Business Model: Key Partnerships

Collaborations with major automotive manufacturers

Garrett Motion Inc. has established strategic collaborations with several leading automotive manufacturers to enhance its product offerings and market presence. In 2024, the company reported net sales of $826 million, with a significant portion derived from original equipment manufacturer (OEM) partnerships.

Strategic alliances with technology firms

In pursuit of innovation, Garrett has formed strategic alliances with technology firms to develop advanced turbocharging systems and hybrid technologies. In 2024, the company secured significant contracts in the marine and power generation sectors, emphasizing its focus on high-performance turbochargers. This collaboration aims to leverage technological advancements for improved efficiency in their products.

Partnerships with suppliers for raw materials

Garrett relies on robust partnerships with suppliers to ensure a steady supply of raw materials essential for turbocharger production. As of September 30, 2024, the cost of goods sold amounted to $660 million, indicating the importance of effective supply chain management in maintaining profitability.

Joint ventures in electric and hybrid technology

Garrett has engaged in joint ventures focused on electric and hybrid technology, particularly in response to the growing demand for zero-emission vehicles. This strategic direction aligns with their development of innovative products such as the E-Powertrain, which has received letters of intent from major truck manufacturers. The company reported an Adjusted EBITDA of $144 million for the third quarter of 2024, reflecting the financial impact of these joint ventures.

Partnership Type	Description	2024 Financial Impact (in millions)
OEM Collaborations	Collaborations with major automotive manufacturers for product integration	$826
Technology Alliances	Partnerships with tech firms for advanced product development	$144 (Adjusted EBITDA)
Supplier Partnerships	Strategic partnerships for raw material sourcing	$660 (Cost of Goods Sold)
Joint Ventures	Initiatives focused on electric and hybrid technology	$27 (gain on sale of equity interest)

Garrett Motion Inc. (GTX) - Business Model: Key Activities

Research and development of turbocharging technologies

Garrett Motion Inc. (GTX) has invested significantly in research and development (R&D) to advance its turbocharging technologies. For the three months ended September 30, 2024, the company reported an increase in R&D expenses of $6 million, totaling $43 million compared to $37 million in the same period of 2023. This investment is focused on enhancing product performance, developing hybrid and zero-emission technologies, and securing contracts in new markets.

Manufacturing and assembly of automotive components

Garrett's manufacturing operations are crucial for producing high-quality automotive components. The company reported a cost of goods sold (COGS) of $660 million for the three months ended September 30, 2024, a decrease from $784 million in 2023, reflecting a 15.8% decline due to lower sales volumes and commodity deflation. The total assets as of September 30, 2024, were reported at $2.155 billion, with inventory levels at $267 million, indicating the scale of operations.

Quality control and testing of products

Quality control is a fundamental aspect of Garrett's operations, ensuring that all products meet rigorous standards. The gross profit margin for the three months ended September 30, 2024, was 20.1%, up from 18.3% in the previous year. This improvement demonstrates effective quality control and operational efficiency. Furthermore, the company has implemented testing protocols to ensure product reliability and performance, particularly in the face of competitive pressures in the automotive market.

Sales and marketing of products to OEMs and aftermarket

Garrett's sales and marketing strategies are pivotal for reaching original equipment manufacturers (OEMs) and the aftermarket. The company generated net sales of $826 million for the three months ended September 30, 2024, down from $960 million in the prior year, indicating a 14% decline attributed to lower demand in gasoline and diesel applications. The breakdown of sales by product line for the same period is as follows:

Product Line	Q3 2024 Sales (in millions)	Q3 2023 Sales (in millions)	Year-over-Year Change (%)
Diesel	$180	$229	-21%
Gasoline	$360	$441	-19%
Commercial Vehicle	$155	$156	-1%
Aftermarket	$117	$118	-1%

The company continues to focus on strengthening relationships with OEMs and expanding its presence in the aftermarket to drive future sales growth.

Garrett Motion Inc. (GTX) - Business Model: Key Resources

Advanced manufacturing facilities

Garrett Motion Inc. operates advanced manufacturing facilities that are critical to its production capabilities. As of September 30, 2024, the company reported property, plant, and equipment valued at $450 million. These facilities are equipped with modern technology tailored for turbocharging and zero-emission solutions, positioning Garrett to meet growing demand in the automotive sector.

Intellectual property portfolio in turbocharging technology

Garrett holds a robust intellectual property portfolio, including numerous patents related to turbocharging and hybrid technologies. This portfolio is essential for maintaining competitive advantage and fostering innovation. The company continues to invest significantly in research and development, with R&D expenses reaching $62 million for the nine months ended September 30, 2024, reflecting a strategic focus on advancing its technology offerings.

Skilled workforce with engineering expertise

Garrett's success is heavily dependent on its skilled workforce, particularly in engineering and technology development. The company employs a diverse team of engineers and technicians dedicated to innovation in turbocharging and electrification technologies. Employee compensation, including stock compensation expenses, amounted to $17 million for the nine months ended September 30, 2024. This investment in human capital is crucial for sustaining operational excellence and driving future growth.

Strong financial backing and liquidity

Garrett Motion Inc. has demonstrated strong financial backing, with total current assets of $1.143 billion and cash and cash equivalents of $96 million as of September 30, 2024. The company also has a revolving credit facility with an available borrowing capacity of $600 million. This liquidity allows Garrett to invest in its manufacturing capabilities and technology advancements while managing operational challenges effectively.

Key Financial Metrics	Amount (in millions)
Property, Plant, and Equipment	$450
Research and Development Expenses (9M 2024)	$62
Employee Compensation Expenses (9M 2024)	$17
Total Current Assets	$1,143
Cash and Cash Equivalents	$96
Revolving Credit Facility Capacity	$600

Garrett Motion Inc. (GTX) - Business Model: Value Propositions

High-performance turbochargers for improved fuel efficiency

Garrett Motion Inc. specializes in high-performance turbochargers designed to enhance the fuel efficiency of internal combustion engines. These turbochargers are engineered to optimize air intake, which significantly boosts engine performance while reducing emissions. In 2024, Garrett reported a revenue decrease of 14% in turbocharger sales, reflecting broader market challenges but also emphasizing their commitment to innovation in fuel-efficient technologies.

Innovative solutions for hybrid and electric vehicles

As the automotive industry shifts towards hybrid and electric vehicles, Garrett has positioned itself as a leader in developing advanced solutions tailored for these markets. The company has secured contracts for its E-Powertrain technology, which aims to enhance the performance of electric and hybrid systems. In the third quarter of 2024, Garrett's Adjusted EBITDA reached $144 million, supported by its investments in zero-emission technologies.

Customization options for automotive manufacturers

Garrett provides extensive customization options for automotive manufacturers, allowing them to tailor turbocharging solutions to specific vehicle requirements. This flexibility has made Garrett a preferred partner for many OEMs, particularly in the commercial vehicle sector. The company reported a consistent demand for its commercial vehicle products, despite a competitive landscape, indicating the value of its tailored solutions.

Strong reputation for reliability and quality

Garrett Motion Inc. maintains a strong reputation for reliability and quality in its products. This is reflected in their gross profit margin of 19.9% for the nine months ended September 30, 2024, which demonstrates effective cost management and product quality assurance. The company’s focus on high-quality manufacturing processes and rigorous testing protocols has solidified its standing in the market, contributing to customer loyalty and repeat business.

Value Proposition	Key Metrics	Impact
High-performance turbochargers	Revenue decrease of 14% in turbocharger sales (Q3 2024)	Reflects market challenges, but emphasizes innovation in fuel efficiency
Innovative hybrid and electric solutions	Adjusted EBITDA of $144 million (Q3 2024)	Supports growth in zero-emission technology applications
Customization options	Consistent demand in commercial vehicle sector	Indicates strong partnerships with OEMs
Reliability and quality	Gross profit margin of 19.9% (9 months ended Sept 2024)	Demonstrates effective cost management and product assurance

Garrett Motion Inc. (GTX) - Business Model: Customer Relationships

Direct engagement with OEMs for tailored solutions

Garrett Motion Inc. actively collaborates with Original Equipment Manufacturers (OEMs) to develop customized solutions that meet specific performance and efficiency requirements. In the third quarter of 2024, the company reported a net income of $52 million and an Adjusted EBITDA of $144 million, reflecting effective engagement strategies that directly cater to OEM needs.

Aftermarket support and service for customers

Garrett's aftermarket sales increased by $8 million or 2% in the third quarter of 2024, driven by high demand for replacement parts across Europe, China, and North America. This segment accounted for 14% of total sales in Q3 2024. The company aims to enhance customer satisfaction through robust support services, which are evidenced by its favorable aftermarket conditions and continued high demand.

Region	Aftermarket Sales (Q3 2024)	Change from Q3 2023 (%)
North America	$40 million	-1%
Europe	$50 million	+3%
Asia	$20 million	+5%

Loyalty programs for repeat customers

Garrett Motion has implemented loyalty programs aimed at retaining customers and encouraging repeat business. While specific financial metrics related to the loyalty programs were not disclosed, the increase in aftermarket sales indicates positive customer retention outcomes. The loyalty initiatives align with the company’s broader strategy of fostering long-term relationships with clients.

Active customer feedback mechanisms

Garrett Motion emphasizes the importance of customer feedback in refining its product offerings and service quality. The company has established mechanisms to gather insights from its OEM partners and aftermarket customers. This proactive approach allows Garrett to adjust its strategies based on real-time data and customer needs. The effectiveness of these mechanisms is reflected in the company's ability to maintain a gross profit percentage of 20.1% in Q3 2024, which is an improvement from 18.3% in Q3 2023.

Garrett Motion Inc. (GTX) - Business Model: Channels

Direct sales to automotive manufacturers (OEMs)

Garrett Motion Inc. primarily engages in direct sales to automotive manufacturers, accounting for a significant portion of its revenue. For the three months ended September 30, 2024, OEM sales reached $695 million, representing approximately 84% of total net sales of $826 million. The company has established strong relationships with major global automotive manufacturers, enabling it to provide tailored turbocharging and electrification solutions.

Distribution through independent dealers

Garrett also distributes its products through independent dealers. For the same period, aftermarket sales contributed $117 million, or about 14% of total net sales. This channel allows Garrett to reach end-users and service providers, ensuring that its products are available for replacement and maintenance in various markets. The aftermarket segment has shown resilience, especially in regions like Europe and Asia, where demand for replacement parts remains strong.

Online platforms for aftermarket parts

In 2024, Garrett has expanded its presence in e-commerce by leveraging online platforms for aftermarket parts. This initiative is aimed at reaching a broader customer base, particularly in the wake of increasing digital shopping trends. The company has not disclosed specific revenue figures from online sales, but the overall aftermarket segment has demonstrated a 2% increase in sales year-over-year, indicating a positive trend in this channel.

Trade shows and industry conferences

Garrett actively participates in trade shows and industry conferences to showcase its products and innovations. These events serve as critical channels for networking with OEMs, suppliers, and potential customers. The company has highlighted its success in securing significant contracts during such events, particularly in the marine and power generation sectors. Participation in these conferences is integral to the company's marketing strategy, allowing it to stay competitive and informed about industry trends.

Channel	Revenue (Q3 2024)	Percentage of Total Sales	Year-over-Year Change
OEM Sales	$695 million	84%	Decrease of 15%
Aftermarket Sales	$117 million	14%	Increase of 2%
Online Platforms	N/A	N/A	N/A
Trade Shows	N/A	N/A	N/A

Garrett Motion Inc. (GTX) - Business Model: Customer Segments

Automotive manufacturers (OEMs)

Garrett Motion Inc. serves a wide range of automotive manufacturers, focusing on providing turbocharging and zero-emission technology solutions. In the third quarter of 2024, net sales from diesel products amounted to $180 million, representing 22% of total sales for that period. Sales of gasoline products were $360 million, accounting for 43%. The company continues to face industry challenges, particularly in Europe and China, impacting demand for its products.

Aftermarket customers for replacement parts

Garrett's aftermarket segment generated $117 million in sales during the third quarter of 2024, which is 14% of total sales. This reflects a slight decrease of 1% compared to the previous year. The demand for replacement parts has remained robust, particularly in Asia and Europe, where favorable conditions have been noted. The company aims to enhance its aftermarket offerings to capitalize on this demand.

Commercial vehicle market

In the commercial vehicle market, Garrett reported sales of $155 million, which constituted 19% of total sales for the third quarter of 2024. The segment has shown resilience despite a challenging environment, particularly in construction and agriculture. The company has also noted increased demand for natural gas applications in the on-highway industry, especially in China.

Emerging markets focused on electric vehicles

Garrett is actively exploring opportunities in emerging markets, particularly those focused on electric vehicles (EVs). The company has secured contracts for its E-Powertrain technologies, showcasing its commitment to electrification. The growing demand for zero-emission solutions has driven Garrett to invest in R&D, with expenses increasing by $10 million in 2024. The company aims to leverage its technological advancements to serve the evolving needs of the EV market.

Customer Segment	Q3 2024 Sales (in millions)	Percentage of Total Sales
OEMs (Diesel)	$180	22%
OEMs (Gasoline)	$360	43%
Aftermarket	$117	14%
Commercial Vehicles	$155	19%

Garrett Motion Inc. (GTX) - Business Model: Cost Structure

Costs associated with R&D and innovation

The total research and development (R&D) costs for the nine months ended September 30, 2024, amounted to $138 million, compared to $128 million for the same period in 2023. This increase reflects a focus on new technologies and the transition to zero-emission technologies.

For the three months ended September 30, 2024, R&D costs were $49 million, up from $42 million in the same period of 2023.

Period	R&D Costs (in millions)
Q3 2023	$42
Q3 2024	$49
9M 2023	$128
9M 2024	$138

Manufacturing and operational expenses

For the nine months ending September 30, 2024, Garrett Motion reported a total cost of goods sold (COGS) of $2.108 billion, a decrease from $2.374 billion in the same period in 2023. The reduction in COGS was primarily driven by lower sales volumes and commodity deflation.

For the three months ended September 30, 2024, COGS was $660 million, down from $784 million in Q3 2023. The gross profit margin for Q3 2024 was 20.1%, compared to 18.3% in Q3 2023.

Period	COGS (in millions)	Gross Profit Margin (%)
Q3 2023	$784	18.3%
Q3 2024	$660	20.1%
9M 2023	$2,374	19.3%
9M 2024	$2,108	19.9%

Marketing and sales expenditures

For the three months ended September 30, 2024, selling, general, and administrative (SG&A) expenses were $53 million, down from $59 million in Q3 2023. As a percentage of sales, SG&A expenses accounted for 6.4% in Q3 2024 compared to 6.1% in Q3 2023.

For the nine months ended September 30, 2024, SG&A expenses remained consistent at $178 million, the same as the previous year.

Period	SG&A Expenses (in millions)	Percentage of Sales (%)
Q3 2023	$59	6.1%
Q3 2024	$53	6.4%
9M 2023	$178	6.1%
9M 2024	$178	6.8%

Administrative and overhead costs

Interest expenses for the three months ended September 30, 2024, were $37 million, down from $48 million in Q3 2023. For the nine-month period, interest expenses increased to $130 million from $104 million in the prior year. The effective tax rate for Q3 2024 was reported at 31.6%, compared to 18.6% in Q3 2023.

In addition, the company had repositioning costs of $4 million for the three months ended September 30, 2024, compared to $6 million in the prior year.

Period	Interest Expenses (in millions)	Repositioning Costs (in millions)
Q3 2023	$48	$6
Q3 2024	$37	$4
9M 2023	$104	$14
9M 2024	$130	$16

Garrett Motion Inc. (GTX) - Business Model: Revenue Streams

Sales of turbochargers and related components

For the three months ended September 30, 2024, Garrett Motion Inc. reported net sales of $826 million, a decline of 14% compared to the previous year. Within this, turbocharger sales, particularly in the gasoline and diesel segments, experienced significant reductions. Gasoline product sales dropped by $81 million (19%), and diesel product sales decreased by $49 million (21%).

Aftermarket parts sales

Aftermarket sales totaled $117 million for the three months ending September 30, 2024, which is a slight decrease of $1 million or 1% from the previous year. However, there was a favorable aftermarket condition noted in Asia and Europe, which partially offset the decline in North America.

Licensing of technology and patents

Garrett Motion has engaged in licensing agreements for its technology, particularly in turbocharging and hybrid systems. The specifics on revenue from these licensing agreements are not detailed in the provided financial reports, but the company continues to explore new licensing opportunities as it expands its product offerings.

Long-term contracts with OEMs for supply agreements

Long-term contracts with Original Equipment Manufacturers (OEMs) form a critical revenue stream. For the nine months ended September 30, 2024, OEM sales made up a significant portion of total sales, with $2.241 billion from OEMs compared to $350 million from aftermarket sales in the same period. This reflects the strong reliance on established relationships with OEMs to secure consistent revenue streams.

Revenue Streams	Q3 2024 Sales (in millions)	Q3 2023 Sales (in millions)	Change (%)
Turbochargers and related components	$826	$960	-14%
Aftermarket parts	$117	$118	-1%
OEM Contracts	$2,241 (9M 2024)	$2,556 (9M 2023)	-12.3%
Licensing Revenue	Not specified	Not specified	N/A

Article updated on 8 Nov 2024

Resources:

1. Garrett Motion Inc. (GTX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Garrett Motion Inc. (GTX)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Garrett Motion Inc. (GTX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.