Honeywell Exec Says Higher CAFE Standards Could Boost Turbo Sales

DETROIT – Proposed legislation to increase fuel economy currently making its way through Congress could benefit sales of turbochargers to the U.S. automotive industry, a supplier executive says.

Nevertheless, Olivier Rabiller, Honeywell International Inc.’s vice president-customer management, passenger vehicles, says he sympathizes with cash-strapped domestic auto makers, which oppose a combined car/truck average fuel economy of 35 mpg (6.7 L/100 km) by 2020.

“It speaks to their profitability, and the U.S. car makers are not in a good position right now,” Rabiller tells Ward’s following a presentation to the Automotive Press Assn. here on Thursday.

“It is an ambitious goal, but it’s moving in the right direction,” the Geneva-based executive says, noting the proposed standard is compatible with fuel-economy standards elsewhere in the world.

U.S. auto makers and dealers have called the increase unrealistic and say it fails to account for consumer demand and marketplace realities.

The Senate passed the increase as part of a larger energy bill on June 21, although lawmakers from Michigan – home to Detroit’s Big Three – have pledged to fight the legislation. The House will take up the debate in the fall.

While endorsing the legislation, Rabiller also admits a mandated fuel-economy increase would be good for his company, which ranks as the world’s largest manufacturer of turbochargers and wants to place its boosters on more diesel engines in North America.

BMW 330d equipped with Honeywell turbo.

Rabiller declines to detail the Morris Township, N.J.-based company’s U.S. market share, but says Honeywell sold 9 million turbochargers here last year and even more in Europe.

Diesel engines accounted for 51% of all passenger cars sold in Europe in 2006, according to the European Automobile Manufacturers Assn.

“There is no rule pushing Europeans to buy diesels. They like them and feel there is a benefit,” Rabiller says.

A turbocharged diesel engine provides a typical passenger car with significantly greater torque and 20%-40% better fuel economy than a regular gasoline engine, he says.

Honeywell sees a largely untapped market in the U.S., where diesel growth is starting to rise after years of decline.

In 2006, both imported and domestically produced diesels represented 0.82% of the U.S. car market, up from 0.63% in 2005 and 0.40% in 2004, according to Ward’s data.

Related document: U.S. Diesel Car Market Share

Considering consumer demand for greater fuel economy; growing acceptance of the new clean diesels; and given the programs Honeywell currently has with car makers, Rabiller sees overall diesel penetration growing to 10% among light vehicles in the U.S. over the next five years.

“Diesels aren’t (belching black smoke) anymore,” he says, adding new, clean diesel-equipped vehicles are more enjoyable to drive, especially with a turbocharger.

But tighter fuel-economy regulations wouldn’t hurt, either, Rabiller says.

“If a person is driving a big pickup today, he’ll want a big pickup tomorrow too.”