Automotive Turbocharger Market Size, Share & Analysis

[330 Pages Report] The automotive turbocharger market is projected to grow from USD 15.2 billion in 2024 to USD 22.9 billion by 2030, at a CAGR of 7.1%. The growth of the automotive turbocharger market is propelled by harsh emission regulations and shifting consumer inclination for high-performance vehicles. As the automotive industry is transitioning from diesel to gasoline light-duty vehicles and a surge in vehicle hybridization, there could be a promising opportunity for turbocharger manufacturers in gasoline and hybrid variants.

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Market Dynamics

DRIVER: Stringent emission regulations and a surge in sales of gasoline-powered passenger vehicles.

There are various reasons for the decline in the growth of diesel engines. Among them are escalating fuel costs, heightened concerns about global warming, and the higher price tags associated with diesel vehicles compared to petrol counterparts. However, the increasing popularity of gasoline-powered vehicles is driving the demand for turbochargers tailored for petrol engines. Turbocharger manufacturers are thus likely to shift their focus and allocate resources toward developing and producing gasoline turbochargers to meet this rising demand. In countries such as India, South Korea, and Indonesia, the demand for diesel vehicles has slowed, while there has been an increase in demand for petrol engines. Various emission standards, such as Euro 6, China VI, and PROCONVE P-8, have further stimulated the market for gasoline engines. Consequently, this drives the production of turbochargers for passenger cars and contributes to a cleaner environment with reduced pollution.

RESTRAINT: Higher maintenance cost and more cooling oil requirements

Adding a turbocharger to the engine offers advantages; the system operates under more strenuous conditions, leading to wear and tear. Turbochargers must endure high temperatures from exhaust gases, reaching up to 1200°F. Therefore, it's crucial to circulate cooling oil frequently to maintain optimal temperatures and prevent overheating. Maintaining turbochargers requires clean, high-quality oil for efficient operation, and neglecting regular oil changes can lead to premature failure. Consequently, turbocharged engines incur higher maintenance costs due to the need for cooling oil.

Additionally, replacing turbos can be costly. Inadequate maintenance of turbochargers can result in premature failures, further burdening the engine's cooling oil system. However, advancements in water-cooled turbochargers aim to address these issues, making them more consumer-friendly.

OPPORTUNITY: Development of electric turbochargers

The emergence of electric turbochargers presents a significant opportunity in the automotive industry. These innovative turbochargers eliminate turbo lag and deliver enhanced power and improved fuel efficiency. Integrating a high-powered turbine with a motor-driven compressor allows electric turbochargers to engage instantly when the driver accelerates, offering seamless performance.

With fewer technical challenges compared to traditional models, electric turbochargers offer a range of benefits. Key industry players like BorgWarner (US), Garrett Motion Inc. (Switzerland), and IHI Corporation (Japan) have successfully introduced their 48V e-turbochargers, renowned for their fuel efficiency and superior power output. Garrett Motion is developing e-turbos for mass-market passenger vehicles, with a claimed fuel efficiency improvement of up to 10%. These e-turbos have the potential to reduce NOx emissions by up to 20% in diesel engines, with most cases seeing a fuel efficiency improvement of about 2-4%. Other manufacturers, such as Mitsubishi and BorgWarner, are also advancing their electric turbo technology, reflecting the industry's shift towards e-turbo development. Thus, the demand for electric turbochargers will grow in the coming years, signaling a promising opportunity for the automotive sector.

CHALLENGE:Turbo lag

The challenge of turbo lag persists in conventional turbochargers, where there's a delay in generating positive pressure once exhaust gases hit the turbine blades. This lag, exacerbated by frictional and thermal losses, hampers quick acceleration and has hindered the widespread adoption of turbocharged engines. To combat this, manufacturers are innovating with smaller, quicker-spooling turbos and electrically assisted variants, which provide an immediate boost. These advancements drive performance improvements in turbocharged engines, leading to a growing presence of such vehicles in the market, with this trend expected to persist.

Automotive Turbocharger Market Ecosystem.

The major OEMs of the automotive turbocharger market have the latest technologies, diversified portfolios, and strong distribution networks globally. The major players in the automotive turbocharger market are BorgWarner Inc. (US), Garrett Motion Inc. (Switzerland), Mitsubishi Heavy Industry Ltd. (Japan), and IHI Corporation (Japan).

Heavy-duty vehicles hold the largest demand for automotive turbochargers aftermarket.

The automotive turbochargers aftermarket for heavy-duty vehicles (HDV) is estimated to grow steadily during the forecasted period. The growth in the aftermarket for heavy vehicles such as trucks and buses can be attributed to the increasing average life of vehicles, rising average miles driven per year, changing consumer preferences for high-power vehicles, and higher replacement rates, mainly in the European and North American markets. These vehicles have extended hours of continuous operation under rigorous conditions. The average miles driven by HCVs in different regions range from 35,000 miles to 40,000 miles per year, either hauling heavy loads or transporting passengers, which puts significant strain on their engines. As a result, turbochargers in heavy-duty vehicles are subject to greater wear and tear, leading to a higher demand for replacements in the aftermarket.

Further, heavy-duty vehicles are prevalent in regions with robust industrial & commercial activities and well-established transportation infrastructures and economies, such as North America and Europe. Additionally, stringent emission regulations in these regions prompt fleet owners to upgrade their turbochargers to remain compliant and more efficient and eco-friendly models. These factors subsequently help to demonstrate the future growth opportunities in the turbocharger aftermarket for the heavy-duty vehicle segment.

Cast iron will dominate the Automotive Turbocharger Material market.

Cast iron is the top choice for manufacturing automotive turbochargers due to its exceptional heat resistance and ability to withstand high temperatures, reaching up to 900°C. Due to this resilience and durability, cast iron is widely preferred for manufacturing turbocharger housing. Grey cast iron, Ductile Iron, and Silicon Molybdenum are some of the cast iron material grades used for automotive turbocharger housing. Several tier-1 suppliers are using this material to make turbochargers. For instance, Mitsubishi Heavy Industries (MHI) offers turbine housings constructed from cast iron, capable of withstanding temperatures of up to 700°C, and austenitic stainless cast steel, engineered to resist temperatures surpassing 1,000°C. Alternatively, aluminum alloy is another material that grows faster than cast iron and has a vision for weight reduction. According to DergiPark (an academic community), using aluminum alloy to make central turbocharger housing is expected to reduce the weight by 60%. Moreover, due to the robust properties such as strength, machinability, cost-effectiveness, and ease of manufacturing, cast iron contributes to its widespread adoption by key automotive turbocharger companies. Hence, cast iron is anticipated to dominate the material type segment for the automotive turbocharger market.

The agricultural tractors will be the fastest growing turbochargers market in the off-highway application.

The demand for turbochargers in the higher HP tractors has kept rising in recent years. These higher HP tractors (>80HP) are usually fitted with turbochargers due to their ability to increase engine power without significant additional displacement. This is particularly useful for large-scale agricultural operations, where greater horsepower is necessary to handle heavy loads or operate large implements efficiently. Europe is the largest market for high-powered tractors due to the increasing traction of tractors with high-pulling power and the growing demand for commercial agriculture. North America and some parts of Asia also have lower demand for higher HP tractors, whereas large-scale agriculture and mechanization are prevalent in these regions. Major players, such as John Deere, CNH Industrial, and AGCO Corporation, continue to invest in research and development to enhance the capabilities of turbocharged tractors, aiming to meet the evolving needs of farmers worldwide. John Deere 8R Series, Case IH Magnum Series, Massey Ferguson 8700 Series, John Deere 9RX Series, New Holland T9 Series, and Kubota Corporation M7 Series are some tractors equipped with turbochargers. Hence, with the growing sales of high-HP tractors for commercial farming of 100 hectares and larger farmlands which can easily handle a wide range of implements such as rakes, scrapers, and spreaders, the demand for turbochargers is also expected to grow in the future

Asia Pacific is the largest market for automotive turbochargers from 2024-2030.

Asia Pacific is estimated to be the largest market for automotive turbochargers owing to the largest production share of passenger cars and commercial vehicles. Major countries such as China and India have a higher demand for economy & mid-range cars (including Class A, B, and C), with gasoline engines contributing to nearly 50% and 90% in 2023. Asia Pacific is dominated by small cars, such as SUVs and cross-over, where the OEMs focus on engine downsizing with various turbocharger technologies. Considering the recent government initiatives to promote alternate fuel vehicles, the OEMs have introduced downsized gasoline direct injection (GDI) with turbochargers to get similar or better power than naturally aspirated engines. For instance, Hyundai Motors, Kia, Volkswagen, Skoda, Mahindra and Mahindra, Toyota, Suzuki, and Tata are major OEMs offering smaller gasoline engines fitted with turbochargers. This will be a win-win situation for OEMs and consumers as they will get similar performance to naturally aspirated engines with much increase in vehicle cost. Further, the region also makes the maximum contribution to the production of commercial vehicles, and almost all heavy commercial vehicles, including heavy trucks and buses, are driven by diesel fuel and installed with turbochargers. Improving socio-economic conditions in emerging economies such as China, India, Indonesia, and Thailand along with increasing industrialization, e-commerce, and infrastructural development, the production of ICE heavy trucks and commercial vehicles are likely to continue to dominate, which will subsequently boost the turbochargers in the Asia Pacific region.

The LCV segment is projected to be the fastest-growing automotive turbocharger market.

Light commercial vehicles (LCVs) are favored by small-scale businesses and urban areas primarily for their diesel engines, renowned for their robust engine performance and ample torque. The use of turbochargers in LCVs is increasingly common, offering a many benefits such as enhanced fuel efficiency, heightened power output, and reduced emissions. According to AECC, China leads in diesel-based LCV sales with 1.5 million units, followed by India with 500 thousand units. Diesel turbocharged LCV sales in the Asia Pacific region are projected to reach 2.5 million units by 2025, at a CAGR of 6.5% from 2020 to 2025. The escalating demand for LCVs is attributed to the rapid urbanization witnessed in the Asia Pacific region. With urban populations on the rise, there is an increasing reliance on LCVs for logistics and transportation needs. Furthermore, the growing e-commerce sector plays an important role in propelling the LCV market forward, as these companies heavily depend on LCVs for efficient delivery of goods to customers.

Key Market Players

The automotive turbocharger market is consolidated. BorgWarner Inc. (US), Garrett Motion Inc. (Switzerland), Mitsubishi Heavy Industries Ltd. (Japan), IHI Corporation (Japan), and Cummins Inc. (US) are the key companies operating in the market. These companies adopted new product launches, partnerships, and joint ventures to gain traction in the market.

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Recent Developments

• In June 2023, Garrett Motion announced the completion of the expansion of its Wuhan Plant which included the installation of its first high-speed automated production line for advanced variable nozzle technology (VNT) used in turbo-passenger vehicles.
• In April 2023, Garrett Motion Inc. unveiled its latest turbocharger and e-mobility technologies at Auto Shanghai 2023. Its innovative E-turbos enhance power and fuel efficiency, enabling vehicles to achieve the performance levels of larger engines from previous generations while utilizing increasingly compact engines.
• In June 2023, IHI was honored with a supplier commendation in the form of a letter of appreciation from Yanmar Global Experts for its commendable efforts and contributions toward ensuring the stable supply of turbochargers throughout 2022. The award was focused on the adoption of new turbochargers and the company's role in facilitating consistent procurement, with particular emphasis placed on two key aspects that received high praise.
• In March 2022, BMTS showcased its Turbo technology at the Vienna Motor Symposium 2022. Its intention was to address the increasing demand for mobility, meet climate targets, and ensure future affordability in the mobility sector.
• In September 2022, Garrett Motion showcased E-Turbos at the IAA Transportation Exhibit. The plan was to promote the use of E-Turbos in vehicles and focus on the improvements that E-Turbos have compared to traditional turbochargers.

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