Turbocharger Market Getting Crowded

Between Europe's booming turbo-diesel market and the growing popularity of gasoline direct injection in small-displacement engines, the outlook for turbochargers could not be brighter.

According to one estimate, demand for turbochargers for light and commercial vehicles is expected to more than double over the next 10 years to 35 million units annually. Strict new emissions regulations requiring drastically improved fuel economy is providing the impetus.

Two players — BorgWarner Inc. and Honeywell International Inc. (maker of Garrett turbochargers) — dominate the market, supplying about 70% of turbochargers worldwide.

That could change. Auto makers eager to see more competition for the established players — or perhaps concerned BorgWarner and Honeywell lack capacity to handle overwhelming demand — have invited Tier 1 suppliers to enter the market.

At the recent Frankfurt Motor Show, Siemens VDO Automotive and Mahle GmbH disclose plans to begin production of turbochargers within three years.

Both companies have supplied engine components for air management, but neither has been in the forced-induction business before. Mahle is best known for pistons and valvetrain systems, while Siemens is deep in engine-management, throttle-body and fuel-injection expertise.

Robert Bosch GmbH also is being courted to join the fold. Gottfried Schiller, director-engineering, engine management systems with Bosch in North America, tells Ward's “there is a likelihood” the supplier will announce plans to produce turbochargers. “The turbocharger market is expanding, and it would fit in the Bosch portfolio,” Schiller says.

OEMs are gravitating to turbochargers because they reduce fuel consumption and emissions and allow for downsizing of engines, while enhancing performance.

Mahle gained turbocharger knowledge with its 2005 acquisition of Cosworth Technology Ltd. and folded the group into a subsidiary known as Mahle Powertrain, devoted to the development, design and application of turbocharged engines.

The German supplier says it is developing wastegate exhaust gas turbochargers in the engine power class up to 268 hp for gasoline engines and variable flow turbine (VFT) turbochargers for diesel engines with a maximum 201 hp.

To accommodate exhaust gas temperatures up to 1,922° F (1,050° C) in gasoline engines, Mahle is employing heat-resistant materials such as cast steel for the turbine housing and exhaust manifold, as well as nickel-based super alloys for the turbine wheel.

Mahle says it has succeeded in lowering fuel consumption 15% at full load as a result of exhaust-gas recirculation technology developed in-house.

Likewise, Siemens VDO says it can achieve a 25% reduction in carbon dioxide emissions by replacing a conventional 1.8L 4-cyl. with a turbocharged GDI 1.4L 4-cyl. Despite the powertrain downsizing, performance is not compromised.

Reiner Weingärtner, vice president-technology for gasoline systems at Siemens VDO, tells Ward's the supplier has a development contract with an auto maker for a turbocharged gasoline engine (with a wastegate), slated for production in 2010.

“Then we have several developments in the background, which come soon afterward,” Wendelin Kluegl, vice president-technology for Siemens VDO's powertrain division, tells Ward's. “Our focus is on gasoline because we see big market growth in that area.”

Meanwhile, Kluegl says diesel engines already have achieved “state of the art” status in efficiency and technology, although he says Siemens VDO's approach adapts to both gasoline and diesel mills.

At Frankfurt, Siemens displayed a concept showing the company's systemwide approach, including its own piezo-based injectors, fuel rail, sensors and high-pressure pump. Siemens VDO also already has developed the actuators for a variable-nozzle turbine geometry.

Kluegl confirms OEMs have invited suppliers to enter the world of forced induction. “It's a big market,” says Kluegl, noting Honeywell and BorgWarner “are restricted in development resources. That was one of the reasons our customers contacted us, to help them.”

For instance, Weingärtner says Siemens VDO is developing a turbo speed sensor, adapted primarily for highly dynamic gasoline engines. The engine controller (also supplied by Siemens VDO) can be programmed easily to govern this function.

The new market initiative is more than a mere research project for Siemens VDO, and even though the company is being acquired by Continental AG, Kluegl says he expects the program to remain active.

Meanwhile, BorgWarner has been building a powerhouse since acquiring European turbocharger producers Kuhlman Corp. in 1999 and Kuhnle, Kopp & Kausch in 1998.

At the time, BorgWarner quantified the turbocharger market at 7.1 million units — 5.1 million for passenger cars and 2 million for commercial vehicles. Today, BorgWarner does not disclose how many turbochargers it produces.

But the company is ramping up output to accommodate burgeoning demand. In addition to five turbocharger plants in the U.S. and Europe, BorgWarner has joint-venture operations in Japan and India.

This year, BorgWarner's Turbo & Emissions Systems division announced plans for a new turbocharger plant in Poland to start production in early 2009, in addition to a plant expansion in Hungary.

In South Korea, the company has a new turbocharger plant, and a new one in China is gearing up for growth in that emerging market. Further expansion in Asia is being considered, Roger Wood, president and general manager-the Turbo & Emissions Systems unit, tells Ward's.

Wood says it is natural to expect new players as the market grows. But he says BorgWarner's 50-some years of experience is a major advantage. “There is a huge difference between producing a robust and reliable turbocharger and wanting to produce a robust and reliable turbocharger,” he says.

His company's forecast calls for more than 40% growth in turbocharger sales over the next five years.

At Frankfurt, BorgWarner touted its capabilities on the new Volkswagen Tiguan cross/utility vehicle. The supplier says the Tiguan is the world's first mass produced vehicle with a highly turbocharged engine, a 2.0L 4-cyl.

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