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Dominated by Asia-Pacific, the global automotive turbocharger market is anticipated to reach USD 21.66 Billion by 2027 with the CAGR of 10.56% - Bonafide Research
May, 02
2022

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Dominated by Asia-Pacific, the global automotive turbocharger market is anticipated to reach USD 21.66 Billion by 2027 with the CAGR of 10.56% - Bonafide Research

 

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A turbocharger, also known as a turbo-supercharger, is a turbine-driven forced induction device. An automotive turbocharger is a system that helps an engine to produce more power and torque through forced induction. A turbocharger is basically a gas compressor. The turbocharger market includes turbochargers for new passenger and commercial vehicles as well as turbochargers for replacement use in the global aftermarket. Further, the adoption of electric vehicles is increasing day by day globally. For this reason, many major firms are taking initiatives towards the manufacturing of e-turbocharging for electric vehicles, which will help to boost the efficiency of the vehicle. Turbochargers have greater power density and are more efficient than naturally aspirated engines. A turbocharger is an integral part of any internal combustion engine that enhances the performance of the vehicle. A turbocharger increases the amount of air intake in the combustion chamber with the help of unused exhaust air. Also, the turbocharger plays an important role in improving the efficiency of a particular vehicle.
Different types of turbochargers are used in vehicles to improve the overall performance and efficiency of the engine. According to the report, the turbocharger market is segregated into three major technology types, i.e., variable geometry turbochargers (VGT), wastegate turbochargers, and electric turbochargers. The variable geometry turbocharger is leading the market with more than 65% of the value share, and it is expected to capture a higher market share during the forecast period than the wastegate turbocharger technology. An electric turbocharger is used to eliminate turbo lag and assist a normal turbocharger at lower engine speeds where a conventional turbocharger is not much efficient. Various major players, such as Garrett Motion, BorgWarner, and Continental AG, have been successful in launching their 48V e-turbos into the market. These e-turbos are fuel-efficient and offer better power output. Therefore, the demand for these turbochargers is expected to be high in the coming years. The increasing utilization of electric turbochargers is expected to provide a new scope of opportunities for the market in the forecast period.

According to the research report, "Global Automotive Turbocharger Market Outlook, 2027" published by Bonafide Research, the automotive turbocharger market is expected to reach more than USD 21 billion by 2027. It is expected to expand at a compound annual growth rate (CAGR) of more than 10% in 2022–2027. Stringent emission norms and increasing adoption of TGDI (Turbocharged Gasoline Direct Injection) technology are expected to drive the automotive turbocharger market. Rising emission control strides will benefit the automotive turbocharger market. Original equipment manufacturers (OEMs) have been fine-tuning automobile turbochargers in order to meet rising client demand. This has accelerated the turbocharger market by increasing vehicle turbocharger sales. The global automotive turbocharger market is segmented into five prominent regions, including North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. Among these regions, Asia-Pacific is anticipated to lead the market with more than 60% of the market share during the forecast period. The growing number of automotive vehicles in developing economies such as China and India is expected to support the growth of the turbocharger market in the Asia-Pacific region. This expansion can be attributed to improved social-economic conditions in developing communities. Initiatives taken by the government are anticipated to motivate manufacturers to use turbochargers is the region as they reduce harmful carbon emissions. A majority of the population in the region is also increasingly adopting vehicles equipped with turbochargers in order to obtain an improved experience. Asia-Pacific countries such as China, Japan, South Korea, and India are estimated to be the largest vehicle producers across the globe. In 2019, these countries occupied 49% of the total vehicle production globally. Rapid urbanization in the region, combined with rising per capita income, has increased demand for higher-efficiency equipment. The number of people in the Asia-Pacific region is projected to upgrade from two-wheelers to four-wheelers, which could enhance the future growth of the turbocharger market. Also, the Asia-Pacific region is the largest producer of passenger cars in the world due to the presence of leading manufacturers in the region.

China is projected to lead the global automotive turbocharger market by occupying a higher market share during the forecast period. China sold a significantly high number of vehicles in the last year and this is expected to increase in upcoming years. In 2020, China was the world’s leading car producer, with more than 21 million passenger cars, claiming a 29.7% share of global vehicle production. Based on rising customer demand, Garrett China has delivered more than 10 million turbos over the past four years alone, ranging from conventional turbos for diesel and gasoline-fueled engines to electric products. As a result of that, in 2020, Garrett Motion Inc., a leading automotive technology provider, announced the achievement of the delivery of its 20 millionth turbocharger produced in China. In addition to that, the Chinese government implemented conventional pollutant emission limits in order to reduce the rising threat of GHG emissions. In 2018, China finalized China VI standards, which were applied to new heavy-duty diesel vehicles nationwide in two different stages. The first stage (China VI-a) was applied to gas engines in July 2019, urban HDVs in July 2020, and all new HDVs in 2021. The second stage (China VI-b) includes requirements such as anti-tempering monitoring and remote on-board diagnostics data reporting. China VI-b was applied to gas engines in January 2021 and is expected to be applied to all new HDVs by 2023. On the other hand, despite the lockdown situations, India has officially moved to tighter emission norms for motorized two-wheelers and four-wheelers. As per the BS-VI emission norms implanted by the Indian government, petrol vehicles will have to impose a 25% reduction in their nitrogen oxide emissions (NOx). Diesel engines should have hydro carbon and nitrogen oxide (HC+NOx) standards of 43%, NOx levels of 68%, and particulate matter levels of 82%.
The prominent factor which is expected to challenge the automotive market is fuel efficiency. A turbocharger is powered by the unused exhaust gases of the combustion engine. Based on these considerations, many developers and manufacturers have made turbocharging technology their primary product. North America is the third largest market for turbochargers, with countries such as the U.S., Mexico, and Canada accounting for a significant portion of the turbocharger market. In the North America region in 2020, turbochargers were only found in 1% of vehicles. Over time, this ratio reached 34% in 2019. Also, it is anticipated that eight out of ten new vehicles sold in the United States will be turbocharged during the forecast period. In North America, Mitsubishi turbocharger is an original equipment manufacturer and supplier to all the top automotive and vehicle manufacturers. The company is able to design and develop a turbocharger as per consumers' demands. Mitsubishi Turbocharger is a division of Mitsubishi Heavy Industries Ltd. (MHI). Mitsubishi Engine North America Inc. is changing its name to Mitsubishi Turbocharger and Engine America as the company is expanding its base globally.

A turbocharger fitted to a 1.8-litre engine can deliver the peak power of a 3-litre naturally aspirated unit. However, it uses 15% less fuel compared to conventional vehicles. Demand for turbochargers in Europe is rapidly increasing because direct injection diesel engines are witnessing higher adoption in passenger cars. Currently, more than 75% of new vehicles sold in Europe are equipped with turbochargers, and this figure is expected to rise during the forecast period. In the European automotive industry, large naturally aspirated engines are being replaced by smaller and more efficient turbo engines. Turbo-charging is considered a mature technology across the region. In addition to that, recent developments in the automotive industry have also significantly boosted the demand for turbochargers in Europe. As a global leader in engineering and manufacturing, the Mitsubishi Heavy Industries (MHI) group delivers innovative and integrated products into a wide range of industries. As for the European region, the company has a division named Mitsubishi Turbocharger and Engine Europe B.V. Germany is expected to have the largest market share in the European region by 2027. Germany has substantial potential for hybrid and electric vehicle development due to rising demands across the country. Germany has become the essential centre for research and development for product innovation. According to OICA statistics, total vehicle production in Germany was calculated to be 986635 units. During the forecast period, this ratio is anticipated to reach more than 2372700 units.

Further, the Latin America region is expected to witness a significant amount of market growth due to its low-cost advantages over other developing regions. In Latin America region, demand for commercial vehicles (trucks and buses) is growing. In addition to that, the population of Latin America is more encouraged to adopt vehicles with fewer carbon emissions. Honeywell Turbo Technologies, the leading global developer of automotive turbochargers, predicted that from 2014–2024, turbocharger penetration in Latin America will reach 17%, up from 7%. Also, annual sales for the turbocharger market were calculated to be more than 2 Million in 2019. Brazil is thought to have the region's most developed economy. Brazil increased its vehicle production by more than two Million units in 2020 alone. In fact, Brazil was one of the world's largest automobile manufacturers. Continued pressure to improve the driver experience and meet future requirements is projected to introduce a positive and spurring trend with double-digit growth in the Latin America market. From the research, it has been estimated that Latin America will witness more than 7% increase in turbocharging volume by 2027.

In October 2012, the Brazilian government approved the "Inovar-Auto" program to encourage vehicle technology innovation. This program provides incentives such as increasing the tax on light-duty vehicles and imposing requirements on automakers to qualify for up to a 30% discount. In addition to that, BorgWarner recently passed a major production milestone at its manufacturing facility in Itatiba, producing more than 5 million turbochargers in Brazil. These turbochargers are engineered to help automakers meet fuel economy, performance, and efficiency requirements. Also, the company is introducing its first compact turbocharger; model B01 for flex-fuel engines to meet the clean and energy-efficient turbocharger requirements.

The demand for turbochargers is expected to be largely driven in the Middle East and Africa by the rising consumer preference for luxury passenger vehicles and premium sports cars. It is interesting to note that the oil-rich region is not only keen on importing high-end and sports vehicles but also wants to establish itself as a production hub for luxury sports cars in the near future. Despite infrastructure and regulatory obstacles, the automotive industry in this region is expected to gain momentum during the forecast period, driven by innovation and investment. Also, this growth would connect the region further with the global economy, where the automotive industry is a significant indicator of the economic performance of the region. In 2019, almost two Million commercial and passenger vehicles were sold across the region. During this time, Iran led the market in terms of passenger car sales, followed by Saudi Arabia and Israel. In the commercial vehicle segment, sales were strongest in Saudi Arabia, followed by Iran and Iraq. As for vehicle production, Turkey and Iran dominated the market with more than 1 million production units. The majority of automotive-producing countries across the region are more focused on passenger cars. This increased utilization of automobiles in the region creates higher demands for turbochargers.

For many years, turbochargers have been used in various fuel engines in order to obtain greater power or torque output for a given engine displacement. According to the report, the market is segmented into two fuel types, i.e., gasoline and diesel fuel. The diesel fuel segment is leading the market with more than 68% of the value market share. Higher adoption and the cost-efficient qualities of diesel engines are boosting the demand for them. However, the gasoline segment is expected to witness higher market growth during the forecast period. Further, the market is segmented into two sales channel types, i.e., original equipment manufacturers and aftermarket. The original equipment manufacturers (OEMs) segment dominates the market, accounting for more than 95% of total market revenue. Increasing production of turbochargers and penetration of major market players in this industry are expected to be the driving forces for market growth. The aftermarket segment of turbochargers is likely to grow in the future as many firms are involved in the turbocharger aftermarket.

Impact of Covid-19 on Global automotive turbocharger Market:
The COVID-19 pandemic has affected the global industry by forcing manufacturers to shut down their assembly lines by pushing the economy down. During the outbreak, there were almost zero vehicular movements, which resulted in a lack of requirements for the turbochargers to be installed into new vehicles and spare turbochargers for replacements. However, with the increasing demand for performance and luxury cars, the global market is aiming to get back into a stable economic condition with good sales projections. In addition to that, imposed strict lockdown and social distancing norms had a higher impact on consumer preference. The pandemic situation has forced the various firms in the turbocharger market to adopt new technologies during the operation, which will create a better chance for the growth of the turbocharger market.