Electric steering continues to grow well but it’s been heavy going for suppliers
The arrival of the first electric steering systems in Europe and Japan in the late 1990s heralded a sea change in the steering systems market, the first since the introduction of hydraulic power assistance systems in North America in the 1950s.
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Electric steering systems (EPS) dispense with hydraulics completely and use an electric motor to remove the power demands for steering from the engine.
EPS offers fuel consumption savings of up to 0.2 litres/km, which is equivalent to removing 100kg of mass from the vehicle, because the system draws power only when required by driver input.
Also, electric steering is lighter and easier to assemble than traditional hydraulic systems and there are no hydraulic fluids to dispose of at the end of the vehicle life.
EPS currently account for around 15% of the global steering systems market, and around 40% of the European market. The top four competitors in Europe share over 95% of the market for EPS, with Koyo currently enjoying clear sales leadership with a 35% share according to motor industry experts Global Insight. TRW, Delphi and ZF Lenksysteme hold around 20% of the market each.
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By GlobalDataPenetration in the lower vehicle segments in Europe is rising fast from a high base – but price pressure tends to be fiercest in the smaller car segments.
Progress in the higher segment upwards is forecast to be slower as current EPS does not generate enough power to cope with the heavier axles and higher torque output of premium and large cars. The D segment shows particularly slow take-up due to the classification of many MPVs and SUVs in that segment.
Global Insight expects EPS penetration to be around 80-85% of the total European market in 2009. Take-up in Asia will be around 60% of the total market by 2009 but North American take-up will stay below 10% out to the end of this decade, due to differing demand factors in that market.
For example, “diesel engines have a high torque output compared to petrol engines,” says Vik Barodia, head of global technical research at Global Insight. “EPS greatly reduces torque steer, thus making diesel cars a safer and more comfortable drive. But North America’s ambivalence towards diesel makes for less demand for those benefits.”
The prevalence of large, heavy vehicles in the North American market will also inhibit growth.
The technology continues to grow in European and Asian markets, but the shift to EPS has been slower than expected. As a result, some suppliers have found it difficult to be profitable with both hydraulic and electric systems in production.
German company ZF Lenksysteme, a 50-50 joint venture between ZF and Bosch, said in late 2003 that it was temporarily holding back on new contracts while it managed EPS production costs down by 20%. The supplier also said that EPS is delivering functional and assembly advantages that are not being recognised or paid for by OEMs.
ZF Lenksysteme has the Volkswagen Golf platform contract with volumes around two million units annually by the end of 2004. Technically, the Golf’s steering system has been well received – but the supplier made losses in 2002 and 2003 and does not expect to be profitable until 2005.
Japanese supplier NSK has exited hydraulic systems altogether and believes electric motor production for EPS must be in the 2.5 million unit range to achieve the necessary scale economies. A market share of 35% in EPS in Europe would see Koyo delivering around 2.3 million sets annually.
SupplierBusiness.com
