| Japan's IHI to Construct Turbocharger Plant in Germany February 13, 2008 -- IHI Corp. plans to build a turbocharger plant in Germany via a joint venture with German automaker Daimler AG as part of efforts to bump up output in Europe. The major maker of heavy machinery owns a 51 per cent stake in the joint venture, with Daimler holding 49 per cent. The plant, to be located in the province of Thüringen, will come online next year, with output to reach 1 million units in fiscal 2011. Another turbocharger plant operated by the joint venture on the outskirts of Milan, Italy, will have its annual production capacity ramped up to 1 million units by fiscal 2011. It currently churns out 600,000 turbochargers a year. Subsequently, IHI's European turbocharger output capacity in fiscal 2011 will be 2 million units per year, more than triple the current 600,000. The company is likely to spend a total of 10 billion yen (US$93.53 million) to lift production. Using exhaust gas, turbochargers rotate a car's turbine. The rotating force delivers air from the compressor to the engine, boosting fuel efficiency. In Europe, turbochargers have chiefly been used to lift the power of diesel cars, which emit little carbon dioxide. But automakers are increasingly using turbochargers in gasoline-powered autos to lift fuel efficiency and maintain power, instead of trimming engine displacements. As a result, IHI sees European demand surging. This fiscal year, IHI is forecast to make 2.7 million turbochargers, with global sales to hit roughly 70 billion yen. It hopes to lift its current global market share of 15 per cent to over 20 per cent in fiscal 2011. The company presently shares the third spot with rivals such as Mitsubishi Heavy Industries Ltd. Source: Asia Pulse Daimler's new goal: Be leading European turbocharger supplier by Douglas A. Bolduc, Automotive News, December 03, 2007 Daimler AG says it has relied too much on its turbocharger suppliers. Now it plans to become a leader in the field. "Not long from now, we will be Europe's third-largest turbocharger supplier," Leopold Mikulic, head of passenger-car engines and powertrains at Daimler subsidiary Mercedes-Benz Cars, told Automotive News Europe. He said he wants to reach that goal in three to five years. Says Thomas Weber, Daimler board member for R&D: "Our dependence on the turbocharger suppliers was huge. We decided to invest in our own operation to have competition in the marketplace." The automaker gets more than 50 percent of its turbochargers from IHI Charging Systems International, a joint venture between Daimler and Ishikawajima-Harima Heavy Industries of Japan, Mikulic said. The rest come from suppliers such as Honeywell and BorgWarner. An estimated 14.6 million turbocharger systems were supplied last year worldwide. Here are the market shares for the leaders. Honeywell (Garrett): 56%, BorgWarner: 25%, IHI: 7%, Other: 12%. Source: J.D. Power Automotive Forecasting, Strategy Analytics, Roland Berger 600,000 is goal Daimler's venture, which was set up in 1999, produced about 500,000 units last year. The goal is about 600,000 this year. The business is based in Cernusco Lombardone, Italy, northeast of Milan. Of the 1.26 million units that Mercedes-Benz Cars sold globally in 2006, 40 percent were powered by a diesel. All the diesel-powered cars that Daimler sells have turbochargers. Three of its gasoline engines have the technology, but that is likely to change, Mikulic said. "Downsizing and turbocharging in combination with direct-injection and stratified-charge combustion systems is the way to the future for the gasoline engine," he said. Daimler is not the only company that plans to benefit from growing global demand for turbochargers. Germany's Mahle GmbH, a leading producer of pistons, expects to begin regular production of turbochargers by 2010. Industry watchers say Robert Bosch GmbH, a leader in fuel-injection systems, may join a field dominated by Honeywell Turbo Technologies and BorgWarner Turbo & Emissions Systems. The Roland Berger consulting firm forecasts unit sales to rise to 17.8 million worldwide by 2012 from 14.6 million last year. 2 reasons for spike There are two reasons for the anticipated spike in turbo demand. 1. Turbo boost allows automakers to install smaller, lighter and more fuel-efficient engines in their vehicles while still providing customers the performance of larger-displacement engines. A growing number of smaller gasoline engines are expected to get a turbocharger because of the pressure on automakers to reduce carbon dioxide emissions. 2. Demand is growing in North America and Asia for diesels, which require a turbo for satisfactory performance. BorgWarner CEO Tim Manganello told Automotive News Europe that his company has been increasing its market share. He also said he is unconcerned about being No. 2. "We don't have a strategy to have the largest market share in the turbocharger business," Manganello said. "Our strategy is to be the technology leader." Copyright © 2007, Automotive News Europe
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