Strategic Analysis of the European Market for Variable Valvetrain Technologies

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An analyst briefing on the European market for variable valvetrains.

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Strategic Analysis of the European Market for Variable Valvetrain Technologies

  1. 1. Strategic Analysis of the European Market for Variable Valvetrain Technologies About 90% Gasoline and 10% Diesel Engines to Feature Variable Valvetrain by 2018 Priyank Aggarwal, Research Analyst Automotive & Transportation 28 June 2012© 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property ofFrost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
  2. 2. Today’s Presenter: Priyank Aggarwal Functional Expertise Market Research and Consulting Automotive & Transportation Automotive Design and Development. Experience in telecom network setup, team coordination and resource management. Industry Expertise Exposure to Global Trends in Automotive Industry. Understanding synergies of existing and upcoming technologies in powertrain market.Priyank Aggarwal What I bring to the TeamResearch Analyst, • Knowledge of leading Automotive Technologies and Understanding of the market dynamics.Automotive &Transportation, Career HighlightsGIC, Europe. One and half years experience in Market Research, Forecasting, Market Entry Strategy and Consulting. Before Frost & Sullivan experience in Telecom Network Setup and Optimization. Business ProcessFrost & Sullivan management, Team Development and training at Bank of America Continuum Solutions LimitedGlobal (BACS). Adaptation of greener technologies at BACS and best practices for higher processChennai, India efficiency. Education M.S., Automotive Engineering, Kingston University, London, U.K. B.E., Electronics & Communication, SEAS, M.D.U., India. H.N.D., Electrical & Electronics Engineering, Edexcel, U.K. 2
  3. 3. Focus Points Section Key Takeaway Facts Valvetrain Market Breakdown Valvetrain Market Trends European Variable Valvetrain Market Snapshot Market Drivers Market Challenges VVT Market—Market Breakdown by OEMs Variable Valvetrain Market Opportunity Key Conclusions Valvetrain Technology Roadmap Appendix 3
  4. 4. Key Takeaway Facts1 Gasoline VVT penetration by end of 2011 was close to 73% Diesel VVT penetration expected to be close to 2.5% by 20122 In 2008, over 42 % of the vehicles sales in Europe were under 140gm/km of CO2 band, which increased close to 59% by 2010. Over 75 percent vehicles sold by 2018 to undercut this threshold3 VVT market would grow with the demand of cost effective emission reduction technologies with a strong focus on Rightsizing and Downsizing. Source: Frost & Sullivan Analysis 4
  5. 5. Valvetrain Market BreakdownThe Variable Valvetrain Market is valued at close to €1.2 billion and was divided among the followinggasoline valvetrain types as shown below VVT Market: Percent of production by Gasoline VVT Type, Europe, 2011, 2018 100% 100% 14% 2% 22% 2011 75% 2018 75% 20% 18% 35% 50% 50% 20% 25% 48% 25% 21% 0% 0% Camphasing Elec.Mech.+Camph. Elec.Hydr.+Camph. Electric Act.+Camph. Cam-Less Act. 2011 Market 2011 Market Market Size by 2010-11 Market CAGR Revenues Units/Volume 2018 Growth Rate (Gasoline VVT) €1.20 - € 1.90 - 6.8 M 9.2% 6-7% 1.24 B 1.94 B (CAGR 2011-18) Source: Frost & Sullivan Analysis 5
  6. 6. Key Market Trends 1. Only 73% in a production of 9.6 million gasoline vehicles (2011)Current 2. Valvetrain market is growing consistently with demand of engine Downsizing technologies 3. The valvetrain market has shifted from camphasing to VVA 1. Valvetrain market to experience over 6-7 % CAGRFuture 2. Electric and Hydraulic actuation systems to be the market norm 3. Seamless integration of VVT with Downsizing and Rightsizing techniques Source: Frost & Sullivan Analysis 6
  7. 7. European Valvetrain Market Snapshot VVT Market: Gasoline Engine Penetration Europe, VVT Market: Diesel Engine Penetration Europe, 2011 and 2018 2012 and 201814 12.6M 12 10.6M12 10 9.6M CAGR 8.4M CAGR10 6-7% 19-21% 8 8 87-89% 6 6 73% 4 4 Gasoline Production Diesel Production 2 2 10-12% 2.4% VVT Penetration VVT Penetration 0 0 2011 2018 2012 Scenario 2018 Scenario Scenario VVT Market: Gasoline VVT Pricing Range Europe, 2011 Entry Level Mid Level High End 100 – 120 120 – 180 180 – 240 VVT System Price 2 and 3 4 and 5 6 and 8 Range (Euros) Cylinder engine Cylinder engine Cylinder engine Note : The above is the market average selling price (vendor OEM) for the Gasoline Valvetrain system for naturally aspirated engines Source: Frost & Sullivan Analysis 7
  8. 8. Market DriversKey Market Drivers1. ACEA (2015, 2020) and Euro VI, VII emissions emphasising on loweremissions and higher fuel economy.2. 8 to 10 percent reduction in CO2, with 10 to 12 percent improvement in fueleconomy, VVT systems cost between an attractive €20 to €30 gm/km of CO2reduction.3. In mid to long term, VVT Technology has the potential to be implemented indiesels engines to reduce after treatment costs partially or completely. Source: Frost & Sullivan Analysis 8
  9. 9. Market ChallengesKey Market Challenges1. Present generation valve actuation systems and material technology limits theprice reduction on valvetrain for downsized engines.2. The drive towards modularization of VVTs is yet to gain momentum due to evervarying engine sizes and different emission reduction targets from OEMs.3. The higher cost of Diesel engines reduces the possibility of employing variablevalvetrain to prevent spiraling costs in the short-term and it is hard to strike abalance between Diesel Valvetrain and after treatment costs. Source: Frost & Sullivan Analysis 9
  10. 10. VVT Market—Market Breakdown by OEMs Total VVT Market: OEM split between Camphasing and VVA, Europe, 2011 ~11 million units 1,600 14-16% Production (Thousands)~7 million 1,400 units 1,200 557 1,000 40.7% 800 84-86% 418 259 370 600 320 322 949 252 59.3% 400 164 78 502 184 554 200 453 424 308 322 310 246 184 0 BMW Daimler Fiat Ford GM Hyundai PSA Ren-Nis Toyota VW 2011 2018 VVA Camphasing VVA – Camphasing + Valvelift, Note: Ren-Nis –Renault-Nissan. All figures are rounded. The base year is 2011. Source: Frost & Sullivan analysis. 10
  11. 11. Variable Valvetrain Market Opportunity Production Integration Concept OEMs and Tier 1 and Tier 2 Component Suppliers Manufacturers OEMs and Solution DevelopersOpportunity Opportunity Opportunity 1. Component 1. Material Technologies 1. Standardization and evolution Production, simulation Modularization 2. Increased flexibility to and rapid prototyping accommodate technologies to reduce downsizing and time to market rightsizing Source: Frost & Sullivan analysis. M78A-18 11
  12. 12. Key Conclusions VVT systems to form the basis for Downsizing and Rightsizing VVT to be market standard for Gasoline Microcars and Naturally aspirated engines VVTs is expected to find market in premium diesel Variable segments by 2015–16 Valvetrain Market Electric and Hydraulic actuation systems to be the market norm beyond 2014-15 Standardization in VVTs to bring effective cost reduction for OEMs Source: Frost & Sullivan 12
  13. 13. Valvetrain Technology Roadmap VVT Market: Technology Roadmap, Europe, 1995-2020 Initial VVT Systems Camphasing, 4-5% CO2 dropVariable Valvetrain Systems Evolution Camphasing + Electro Hydraulic Lift (VVA), 8- 10% CO2 drop, Chain and Belt Driven with Downsizing Modularisation Downsizing Modularisation Hydraulic control for Lift Camphasing + Electro Mechanical VVT Designs to Accommodate Downsizing Shaft , 8-12% CO2 drop, Chain Driven, composite coating for Valves and other Peripherals Camp.+ Shifting Camlobe + Elect. Actuation, 7-12% CO2 drop, DLC Coatings for Pistons, Valves, etc. Fully Electro Hydraulic System, 8-15% CO2 drop, it achieved significant breakthroughs in low costs and component standardisation Camless Electro- magnetic Act., Expected 10-20% CO2 drop 1995 2010 2020 Source: Frost & Sullivan analysis. M78A-18 13
  14. 14. Next StepsDevelop Your Visionary and Innovative Skills Growth Partnership Service Share your growth thought leadership and ideas or join our GIL Global Community Join our GIL Community Newsletter Keep abreast of innovative growth opportunities 14
  15. 15. Your Feedback is Important to Us What would you like to see from Frost & Sullivan?Growth Forecasts?Competitive Structure?Emerging Trends?Strategic Recommendations?Other? Please inform us by “Rating” this presentation. 15
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  17. 17. For Additional InformationLead Analyst Corporate CommunicationsPriyank Aggarwal Katja FeickResearch Analyst, Automotive & Transportation Corporate Communications Manager (+91) 44 6681 4128 (+49) 069 7703343 PriyankAggarwal@frost.com Katja.Feick@frost.comResearch Manager Business Unit LeaderKaushik Madhavan Sarwant SinghResearch Director, Automotive & Transportation Business Unit Leader, Automotive & Transportation (+91) 44 6681 4120 (+44) 207 915 784 KMadhavan@frost.com Sarwant.Singh@frost.com 17
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