October 7, 2013 / 9:20 PM / 6 years ago

Honeywell projects big jump in automotive turbos by 2018

DETROIT, Oct 7 (Reuters) - The use of turbo chargers to boost power in smaller automotive engines is expected to increase rapidly over the next five years, with the greatest growth anticipated in China, according to Honeywell International Inc, a major player in the sector.

Driving the growth spurt are twin pressures on the global auto industry to reduce fuel consumption and exhaust emissions, which in turn are driving an industry-wide reduction in engine size.

“Turbo charging is a no-compromise solution,” said Terrence Hahn, president and CEO of Honeywell Transportation Systems.

The devices, which force-feed a more compressed air-fuel mixture that burns more efficiently in gasoline and diesel engines, can help improve performance and acceleration in smaller engines, Hahn said, “but not at the cost of fuel efficiency.”

Honeywell, the world’s largest turbo charger manufacturer, forecasts that the devices will be installed on nearly 40 percent of vehicles sold globally in 2018.

That projection, which is in line with independent sector forecasts, amounts to more than 32 million vehicles, up 33 percent from about 24 million this year.

Nearly one-third of those vehicles, about 10 million in 2018, will be sold in China, compared with 4 million this year, Hahn said in an interview with Reuters.

In comparison, turbo charged vehicles in North America are expected to grow from about 3.9 million to 6.5 million over the same period, he said.

China’s higher turbo volume projection is partly a function of an overall vehicle market that continues to outpace North America and Europe. Hahn said tighter emissions regulations and higher taxes on larger engines in China are additional incentives.

Reflecting the rising popularity of turbo chargers in all major markets, Honeywell has more than 500 new applications that are expected to reach production within the next 24 months, Hahn said.

In addition to Honeywell, there are a handful of other players in the sector, notably BorgWarner Inc, Mitsubishi Heavy Industries Ltd and IHI Corp. The devices are used on a broad range of vehicles, from subcompact cars to heavy-duty trucks.

Hahn declined to specify how much revenue the turbo charger business generates for Honeywell. But industry research firms project global revenues for the sector of more than $12 billion by 2017.

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