LONDON, April 12, 2016 /PRNewswire/ --
The latest research by just-auto's QUBE automotive research portal indicates that Western Europe's traditional dominance of the global turbocharger market will cease by 2019. All things being equal, the region's turbo leadership will be ceded to China.
Simply, Western Europe is an almost mature market for turbochargers. Its historically large turbocharger market is rooted in the 50% share that diesel has enjoyed in the region's light vehicle market in the past decade or so. Furthermore, its stricter CO2 regulations has seen petrol and diesel engines downsize (requiring some form of turbocharging to maintain power outputs) much earlier than in other regions, leading to a long-term CAGR of 1.8% compared with China's 8.6%, which exceeds the global industry's long-term turbo CAGR of 5.7%.
Currently, the overall global fitment rate for turbochargers is around 37% and by 2030 just-auto's QUBE team expect the rate will be nearly 61%.
China's expected rise to become the largest turbocharger market in the world by 2019 has been precipitated by the country moving further and faster on emission and fuel economy standards than might have been expected. By 2020, China's fuel economy regulations - effectively measured in grams of CO2 per km - will be the third most stringent in the world as it adopts a target of 117g. Only the EU with 95g and Japan with 100g have stricter regulations. As with some other markets, this legislation has been accompanied by punitive taxation, which will drive engine downsizing and adoption of turbochargers. Consequently, we expect fitment to increase from some 28% in 2015 to 47% in 2020 and 64% in 2030.
Other markets that the QUBE service expects to substantially outpace global turbocharger growth in the long-term are India and Russia.
In Russia, there should, in theory, be quite significant increases in turbocharger take up in the long run. Furthermore, increased production in Russia by western brands and an expected parallel decrease in the share of the market accounted for by AvtoVAZ should boost turbo volumes.
The Indian market will enjoy a long-term turbo CAGR of 7.9% largely as a consequence of expected total industry volume growth and the country's position as being second only to Europe in terms of diesel penetration. However, turbo growth in India is expected to be weaker in the long-term than previous projections as the Indian government changed its approach to diesel taxation in October 2014 and substantially reduced diesel's price advantage at the pump. By way of example, the QUBE team were forecasting a long-term CAGR for India's turbo volume to be 10.3% before the legislation change.
About just-auto and QUBE
just-auto.com exists to provide news, analysis and market intelligence to support the automotive industry. We are driven by a passion for an industry with a global turnover of €3 trillion that directly and indirectly supports 60 million jobs. We offer an independent voice with a global remit, championing automotive best practice wherever we find it.
In 2011 just-auto launched QUBE, the automotive database for the auto industry. Supported by a team of experienced automotive analysts, QUBE serves the automotive supply chain, providing them with OEM and supplier automotive competitive analysis, component sector forecasts, and automotive technology intelligence.
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