FEW EUROPEAN DRIVERS wanted automatic transmission in the past, but attitudes are beginning to change.
Only 10-12 percent of new cars in Europe have automatic transmissions. In the US, more than 90 percent of cars use automatics. In Japan 75-90 percent have one.
Many European drivers still treat an automatic transmission as an insult. They 'consider it an attack on their driving ability,' says Michel Dalbourg, communications manager for General Motors Powertrain in Strasbourg, France.
Opposition to automatic transmissions is especially strong in southern Europe. Just 1 percent of new cars in Spain have an automatic transmission, according to Renault. In Italy it is 2 percent, and France 2.6 percent, says the carmaker.
However, transmission manufacturers believe demand for automatics will grow for the next five-10 years.
The reasons: improved products, changing drivers' habits, and new marketing strategies. Many manufacturers now believe the biggest obstacle to the growth of automatic transmission is price.
Luxury carmakers take a different approach. 'Over half of our car production is equipped with an automatic transmission,' says a Mercedes-Benz spokesman.
In Germany, 42 percent of Mercedes sales involve an automatic transmission, according to the research company Marketing Systems. Even in France, 26 percent of Mercedes cars have an automatic.
In contrast, volume carmakers PSA and Renault respectively sold 1.8 percent and 2.8 percent of their cars with automatic transmissions in Europe last year.
But in markets such as Switzerland, where demand for automatic transmission is high, more than 10 percent of PSA and Renault cars have an automatic. Switzerland is the European capital of automatic transmissions: 21.6 percent of new cars have one.
Big growth in 1996
Renault says 1996 was a boom year for automatics. In the 10 biggest European markets, sales of automatics were up 23 percent to 964,000 cars.
Growth varied: there was a 20 percent increase in France, 10 percent in the UK and 6 percent in Switzerland.
The biggest increase, says Renault, was in Germany. Sales of automatic cars jumped 41 percent to 468,000 units. The new Mercedes E class and BMW 5 series may account for a lot of the growth.
'I'm skeptical about such an increase in Germany,' says Juergen Keller, marketing manager for powertrain products at Opel in Ruesselsheim. He says it is difficult to get reliable statistics for the German market.
'We think the automatic transmission sales will grow,' says Keller. 'But it will be a modest increase because of the cost situation. At the moment, we don't see a trend to lower the price with present technologies. But new technologies could have a good impact.'
Fewer than 10 percent of Opel's cars are sold with automatic transmissions, except at the top of its range, says a source in General Motors.
Only 4.2 percent of Corsas are automatics, 5.3 percent of Astras, and 8.6 percent of Vectras. However, 17 percent of Sintras and 32 percent of Omegas had automatic transmissions in 1996.
Others are more optimistic about rising sales.
'We expect automatic transmission to have a 14-15 percent share in 2000,' says Dietmar Pfister, ZF group marketing manager. ZF is a major independent supplier of transmissions. 'In the past two years, its share jumped to over 10 percent of total car production.'
This was a significant change.
'In the 1980s the automatic's share of European car production remained virtually unchanged, at around 8.5 percent,' says analyst Peter Schmidt of AID, a London consultancy.
Ulrich Winzen, senior consultant at Marketing Systems says: 'The image of automatic transmissions has changed. This is thanks to new technologies such as electronic control, which has become common in higher segments. This new image, together with the increasing number of women driving, and the introduction of automatic transmissions in lower segments, will lead to strong growth.'
Price is the problem
The main problem remains price.
The average price of the automatic transmission option on a medium car in Germany is DM2,000-DM3,000 ($1,176-$1,765). The price in France is FF6,000-FF8,000 ($1,044-$1,392).
'At the moment the market is so small that the prices are high. But if an affordable price is proposed, the share of automatic transmission will rocket,' predicts Schmidt at AID.
'To make an automatic transmission worth FF5,500-FF6,000 is up to us. Then customers will come,' says Georges Douin, Renault vice-president in charge of product planning.
To keep cost and price in balance, carmakers must decide their industrial strategy before launching a marketing offensive. Carmakers and their suppliers are quietly preparing such a move.
GM Europe is relying on new technologies to provide affordable products, says Keller. Improved continuous variable transmissions and sequential gearboxes - similar to Porsche's Tiptronic system - are being developed by engineers at Ruesselsheim. 'A big boost will come from new technologies. Opel is working in this direction,' says Keller.
Renault and PSA have cooperated in the development of a new four-speed automatic transmission, code-named DP0. It is due to appear at the end of this year. At Renault, the DP0 will replace an automatic Renault and Volkswagen developed together.
PSA and Renault are spending around FF2 billion ($400 million) on the project. The gearbox will be made in Ruitz, northern France, by STA, a jointly owned subsidiary. Production will start at 800 units a day, rising to 1,400-1,600 units a day.
Renault's strategy is to develop transmissions for its big-volume cars and to outsource them for lower-volume vehicles. Renault buys the Easy automatic clutch system from Automotive Products UK. This is already used on the Twingo. It will soon be available on the Clio and Megane.
At the other end of its range, Renault buys an Aisin automatic transmission to work with the five-cylinder Volvo engine on its Safrane. For the new V-6 engine it has developed with PSA, Renault buys a ZF transmission.
'We think that with a European market opened to all competitors (after 2000), there is no reason why the carmakers with a specific advantage will not use it,' says Guy Povie, automatic transmission project manager at Renault.
'So we want to be ready for this, by preparing new products and increasing capacities. What is not clear is how fast the market will evolve. In Japan, it took 30 years to go from 2 percent market share to the current 80 percent. Japanese carmakers (used a) supply policy to create the automatic transmission market there. Europe is more open than Japan, so it might evolve faster,' says Povie.
Automatic transmission suppliers are also preparing for the future.
ZF is investing more than DM100 million (£59 million) at its Saarbruecken, Germany, plant to make a continuously variable transmission, called TM Ecotronic. It is due to start production in 1998.
Volkswagen Group is likely to use this continuously variable transmission for its Audi brand, and possibly the new Beetle. ZF's output of automatic transmissions has doubled over the past five years. Pfister says output will reach 450,000 units in 1997.
ZF is facing tough competition from Japanese suppliers, mainly Aisin.
'Aisin and Jatco are catching ZF in a pincer movement,' warns one industry expert. Aisin recently gained several former ZF customers, including Saab, Volvo and Fiat.
Jatco supplies BMW cars sold in Japan and Volkswagen's Polo.