The automotive market is the main downstream market for turbochargers. The size of the turbocharger market directly depends on the internal combustion engine production volume and the level of turbocharger configuration rate in the internal combustion engine.
According to the different application fields of internal combustion engines, the downstream market of internal combustion engines can be divided into automobiles, construction machinery, agricultural machinery, ships, generator sets, etc.
The automotive market is the primary application market for internal combustion engines and the main downstream market for turbochargers because of its most significant production and sales scale. Taking the Chinese market as an example, in 2016, China's automotive internal combustion engine accounted for 81.56% of the entire internal combustion engine market.
The configuration rate of automotive turbochargers is increasing year by year: Although automotive internal combustion engines are the main application field of turbochargers, the current configuration rate is still low.
With the rapid development of the automotive industry, global car ownership continues to increase. The world is generally concerned about the increase in petrochemical energy consumption, the decline in air quality caused by automobile exhaust emissions, and the greenhouse effect.
In recent years, the world's primary automobile production and consumption countries and regions have formulated increasingly stringent automobile "energy conservation and emission reduction" policies.
Japan has proposed new fuel economy standards for light vehicles until 2020. It is estimated that the average fuel economy level of passenger cars will increase to 20.3 km/L by 2020, which is a 20.3% reduction from 2009's 16.3km/L.
In 2009, the EU replaced the voluntary CO2 reduction agreement with mandatory legal instruments to introduce EU-wide requirements and labelling for vehicle fuel consumption and CO2 limits. The emission reduction agreement calls for a target of 95g/km CO2 emissions from passenger cars by 2020.
In August 2012, the United States issued fuel economy and greenhouse gas emissions regulations for light vehicles from 2017 to 2025 (Phase II). The regulations call for an average fuel economy of 54.5 mpg for U.S. light vehicles by 2025.
Due to the advantages of high fuel efficiency and low emissions, mature automotive markets such as the United States and regions with faster sales growth, such as China and India, are increasingly using turbochargers.
With the arrival of the time node of the assessment of automobile energy conservation and emission reduction by various governments, the growth space of vehicle turbochargers is large.
By 2021, 48% of new vehicles sold worldwide will be turbocharged technology, up 9 percentage points from 2016. Vehicles equipped with turbochargers include not only conventional cars but also hybrid vehicles.
It is estimated that by 2021, about 70% of mild hybrid vehicles will be equipped with single or multiple supercharging systems. In the future, the automotive market will remain the primary downstream market for turbochargers.
The primary national policy of "energy conservation and emission reduction" is an essential factor in promoting the development of turbochargers. In recent years, China's industrial policy for the automotive industry has always been centred on "energy conservation and emission reduction".
Figure 1 - Production of turbochargers
In 2012, China set a goal to reduce the average fuel consumption of passenger cars to 5.0L/100km by 2020, reduce the fuel consumption of energy-saving cars to less than 4.5L/100km, and reach advanced international levels for new commercial vehicles.
The average fuel consumption of domestically produced passenger cars in 2015 was approximately 7.66 litres/100 km, far from the target of 5.0 litres/100 km in 2020.
Car companies are using energy-saving and emission-reducing tech such as lightweight vehicles, efficient engines, turbocharging, hybrids, electronic control, etc. Turbocharging is often seen as the most efficient and cost-effective option.
Turbocharging mainly plays a role in increasing engine air intake to increase engine power and torque, turbocharging technology can improve the fuel efficiency of gasoline engines by nearly 20% and diesel engines by nearly 40%.
Strongly promoted by the "energy conservation and emission reduction" policy, the deployment rate of turbochargers in new sales vehicles in China will continue to increase. This will promote the further development of China's turbocharger market.
In the context of global economic integration, international turbocharger manufacturers adopt a global product strategy and set up production bases in Europe, Asia-Pacific, North America and other regions to reduce production costs.
Honeywell, BorgWarner, Mitsubishi Heavy Industries, Ishikawajima Harima and other manufacturers have established wholly-owned or joint venture companies in China.
International turbocharger manufacturers dominate the Chinese automotive market with R&D capabilities and product innovation advantages. They monopolize the turbocharger market for passenger cars and high-end commercial vehicles.
Compared with international giants, China's national turbocharger manufacturers still have noticeable differences in production capacity, research and development strength, and management level.
Some leading national enterprises such as Ningbo Fengwo, Hunan Tianyan, Kangyue Technology, Weifang Fuyuan and Ningbo Weifu compete with international giants in the market of low-end automotive turbochargers and non-automotive turbochargers with cost-effective advantages.
But at this stage, they still cannot break the monopoly of international giants on the high-end turbocharger market. In the future, international turbocharger manufacturers will still dominate the domestic market.
Figure 2 - TURBOKOO Turbocharger 171702 For Navistar International Truck Detroit S60 Engine
