Market shake-up: good news or bad?
As has been amply documented, the financial crisis, the collapse in consumer confidence and the decimation of sales in most markets have hit the auto industry harder than it has ever been hit before. Onetime global leader GM is shedding brands and is on the edge of bankruptcy, Chrysler is already in Chapter 11, and ever more suppliers are in trouble, including transmission maker Getrag.
With overall Industry volumes running at as little as half their 2008 levels in many instances, it is sensible to ask how the downturn is likely to affect the take-up of the different systems automakers specify for their vehicles, including transmission systems. The success in the interim of several European vehicle scrappage programs - cash for clunkers schemes - prompts another question: will the resultant boost in demand and the segmentation shift towards smaller vehicles impact on transmission choice? JD Power calculates that the scrappage incentives announced in Europe will add 1.2m units to the West European car market this year, mainly at the lower end of the price scale. Does this mean we will see a move away from the more sophisticated (and thus more expensive) transmission options?
One early indication, prior to the impact of any cash-for-clunkers schemes, can be seen in the figures for DCT transmission fitment to vehicles manufactured in Western Europe in 2008. IHS Global Insight predicted this time last year that the DCT share of European manufacture would rise to 2.4 percent; the outturn proved to be just 1.89 percent.
"DCT is catching on, but it isn't taking the market by storm," commented Andrew Close, senior technical research analyst at the IHS Global Insight automotive group. "We are still optimistic, though you do still have to wonder, given the current economic conditions."
Global Insight's forecasts show the DCT share of Western European light vehicle production rising to 4.34 percent in 2009, breaking the 10 percent barrier in 2012 and hitting 13.5 percent by 2015. On a global level, predicts the organization, the share will climb from 2008's 0.57 percent to 3.8 percent in 2012 and 5.2 percent in 2015.
| DCT share of global and European production | ||||||||
|---|---|---|---|---|---|---|---|---|
| Region | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
| GLOBAL DCT | 0.57% | 1.17% | 1.72% | 2.73% | 3.83% | 4.52% | 4.92% | 5.15% |
| Western Europe DCT | 1.89% | 4.34% | 5.91% | 7.65% | 10.36% | 11.66% | 12.67% | 13.56% |
| Source: I H S Global Insight | ||||||||
Comparable forecasts by JD Power show the Western European DCT manufacturing percentage reaching a plateau of just under 9 percent from 2012 to 2015 - corresponding to 1.4 million units - but with the global figure only rising from 3.1 percent in 2012 to 3.4 percent in 2015.
More interestingly, data from CSM Worldwide suggests that dual clutch transmissions may more than triple their share of West European light vehicle manufacture, rising from 3.5 percent in 2009 to 12.3 percent in 2015.
"The key point is which type of transmission DCT is conquesting," said Global Insight's Andrew Close. "To date it has been automatics, and this market is relatively small in Europe, especially in the smaller vehicle segments where DCT is available."
This, said Close, limits the scope for DCT conquest, prompting the thought that DCT might begin to make inroads into the share of manual transmissions. CSM's forecasts for Europe do indeed show a steady decline in the share of manual transmissions, as well as that for automatics; increasing their shares are both DCT and automated manual transmissions, or AMTs. The latter, observed Chris Guile, powertrain analyst at CSM Worldwide, would be well positioned to benefit from the steady increase in the penetration of hybrids into the European market:
"AMT may have some extra mileage, thanks to hybrids," Guile told DCTfacts.com. "One of the big problems with AMTs is the torque interruption during gear changes, which is acceptable to some drivers in some markets, but is not generally liked. However, if you have an electric motor, as part of a hybrid system, this can be used to fill in the torque interruption, and hence potentially give a cheap and smooth option."
Some automakers were already making good progress in this area, added Guile.
The other big attraction to automakers of AMT systems is that they give the customer clutch-free pseudo-automatic driving at a low cost, and that the systems can be programmed to give good performance in fuel consumption and CO2 emissions test cycles - even if real-world driveability is sometimes poor. As a comparatively low cost system, AMT would thus be in a good position to benefit from Europe's swing to smaller and cheaper cars.
Quite how this will impact on the prospects for DCT's continued expansion will depend on a number of factors; whether the migration to smaller cars proves temporary or permanent, how soon suppliers such as BorgWarner and Getrag are able to bring their low-cost DCTs to market, how quickly fuel prices bounce back up again, and how severe the fines for exceeding Europe's corporate fleet average CO2 emissions turn out to be.
| West European Light Vehicle Production by Transmission Type | |||
|---|---|---|---|
| Region | 2003 | 2009 | 2015 |
| AMT | 2.33% | 3.75% | 5.75% |
| Automatic | 15.81% | 14.87% | 11.94% |
| CVT | 1.10% | 2.38% | 1.51% |
| DCT | 0.10% | 3.47% | 12.29% |
| Manual | 80.66% | 75.52% | 68.51% |
| Copyright © 2009 CSM Worldwide, Inc. | |||
Story Filed: 5/8/2009
By Tony Lewin, managing editor DCTfacts.com