The demand for turbochargers is rising fast, driven by emission regulations and rising fuel costs. A new research report from ABOUT Automotive and Auto Research Analysts on the global turbocharger market provides detailed information on company market shares, product installation forecasts and trends for passenger cars and commercial vehicles to 2010. Matthew Beecham reports.
The current obsession with improving fuel economy and the enforced reduction in emissions is proving a boon for manufacturers of turbochargers. Turbocharging boosts engine performance. It is about achieving the same performance with smaller, more fuel-efficient engines. A turbocharged engine can generate up to 40% more power than a naturally aspirated, non-turbocharged engine. It can also return more miles to the gallon. A turbocharger fitted to a 1.8-litre engine can deliver the peak power of a 3-litre unit but use 15% less fuel. A turbocharged engine is also more environmentally friendly. Because a turbocharger delivers more air to the engine, fuel combustion is cleaner and more thorough. Consequently, turbo manufacturers see no abatement in demand for their product, particularly in Europe where the market for direct-injection diesel engines is powering more and more passenger cars.
A new research study by ABOUT Automotive and Auto Research Analysts estimate that about 62% of new passenger cars were equipped with turbochargers in Western Europe in 2004, the highest concentration in the world. That figure could reach 80% by 2010 as new emission regulations requiring a 25% reduction in CO2 take effect. In particular, manufacturers see great potential for turbocharger installation in the sub-B small segment, such as the Fiat Punto, thanks mainly to the 'dieselisation' of this segment. For some time, diesel engines have been a popular choice in this segment. Some predict that the entire fleet will soon be replaced by turbocharged diesels, leading to such a step change in demand.
The technology has developed significantly since the 1980s when turbochargers had a boy-racer image and were often unreliable. Since then, much of the developmental push has come from the European diesel engine market. Technically, there remains the problem of turbo-lag which creates an unpopular time-lag for performance drivers. Variable geometry turbines have helped but the problem will not be solved unless engine-driven superchargers are used, or electrically powered 'e-boost' devices are used.
While demand for diesel-engines has powered growth for turbochargers, interest in gasoline turbos is also gathering momentum. For gasoline turbocharging to be successful, vehicles must 'feel' and 'drive' like a larger, naturally aspirated gasoline engine. The main thrust of development is focussed on the continuous improvement of the low engine speed performance of the turbocharger. Honeywell Turbo Technologies is working on two programmes for advanced gasoline-engine turbochargers that could be launched in 2006 and 2008, and claims this will be the next major area for growth.
ABOUT Automotive estimate that just 10% of gasoline-powered cars in Europe have turbochargers. This, however, is set to reach 22% by 2010.
From a gasoline perspective, the position in Japan is very similar to Europe, i.e. legislative pressure is driving demand for lower engine emissions, better fuel economy thereby creating new opportunities for turbochargers applied to gasoline direct injection engines.
In other parts of Asia, manufacturers predict a very gradual take up of diesel and gasoline turbochargers as countries such as India and China adopt Euro emission legislation. For instance, in India, growth of turbo-diesel vehicles production will be fuelled by favourable fuel price differentials, implementation of Euro 3 in 2005 plus the fact that Euro 4 favours variable geometry turbine technology. Overall, ABOUT Automotive estimate that just 13% of passenger cars in Asia were fitted with either a diesel or gasoline turbocharger in 2004. Fitment rates across the region could reach 15% by the end of the decade. Meanwhile, the South American market for turbochargers for passenger car applications is expected to remain flat at around 6% installation rates for some time, with most interest occurring in the commercial vehicle segment.
Given the blossoming OE market for turbos, the knock-on effect is a thriving aftermarket business. Truck makers are now demanding that a turbo should last 625,000 miles whereas a passenger car unit should last 155,000 miles. That means, on average, a truck would require a new or reconditioned turbocharger every five to six years.
The global automotive turbocharger light vehicle OEM market is dominated by four key players, with Honeywell Turbo Technologies and BorgWarner leading the critical European marketplace. Trailing Honeywell and BorgWarner is Ishikawajima-Harima Heavy Industries (IHI) and Mitsubishi Heavy Industries (MHI).
The main battleground is Europe, where Honeywell Turbo Technologies dominates the turbocharger market with a 54% share of the passenger car diesel engine market. Honeywell's manufacturing and assembly facility in Bucharest is currently ramping up quality and output on the back of a major development programme involving plant and people. The investment reflects the increasing interest in the Eastern European automotive industry. Germany's BorgWarner ranks in second place, with a 37% share in 2004. Both IHI and MHI are also aiming to increase its European sales of turbochargers for use in cars.
Honeywell also dominates the North American market for turbochargers, controlling around half the market for passenger car applications. IHI, Holset and MHI are also present. In the South American market for passenger car turbos, Honeywell Turbo Technologies is the clear cut leader, producing nearly 60,000 units for the market giving it a 68% share. MHI, BorgWarner and IHI are also present.
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