RobertGmbH may dominate the diesel fuel-injection market in Europe, but it faces a formidable No. 2 competitor in Automotive Systems after its purchase of Inc.'s Lucas Diesel Systems for $871 million.
The acquisition is an ideal fit for, which gets $1.1 billion in new business with customers other than former parent Corp. Delphi also gets a guaranteed place in the market for next-generation diesel technology, as Lucas will produce its first common rail diesel injection system for a European customer, SA, beginning in spring.
By most estimates, the diesel market in Europe will continue on its explosive pace. Diesels make up about 25% of the passenger car market in Europe, and the penetration is expected to reach 30% within four years and 35% by about 2010, Delphi says.
Lucas supplies fuel-injection systems for more than a third of the European diesel car and van market.got the business in its acquisition of LucasVarity plc. TRW put the 8,600-employee operations up for sale as part of a debt-reduction plan.
Delphi gets 850 invaluable diesel engineers and technicians, eliminating the need to invest in staff and resources of its own.
With the acquisition, Delphi says it will be the only supplier of diesel injection systems that also has expertise in aftertreatment, through its purchase last year of the catalyst business from AlliedSignal.
Common rail uses a high-pressure pump for more precise injection and, thus, improved fuel economy, performance and emissions. Its arrival will drive much of the growth in diesel.