MUNICH -- Partsmakers Continental AG and Schaeffler Group are starting to see the powertrain synergies that were promised following Schaeffler's hostile bid for its larger rival in 2008.
Schaeffler, which controls 49.9 percent of Continental's shares, will build Continental's first turbocharger.
This will be the first time that Schaeffler, a maker of clutches and bearings, manufactures a turbocharger. But the company was responsible for the bearings in the turbocharger used in the specially equipped Volkswagen Touareg that won the 2010 Dakar Rally earlier this month.
Conti and Schaeffler say serial production of the turbo will start in the third quarter of 2011. The part will be fitted on a mass-market car made on a European vehicle platform, Continental said without providing more details. Without being more specific, the companies said the turbochargers would be made at a network of plants in western and eastern Europe.
Continental has spent the past three years developing the turbo, which will be mated to gasoline engines.
Hot new niche
Currently, most turbos are combined with diesel engines, however that is changing because turbochargers help improve fuel economy for diesels and gasoline engines, with no loss of performance.
"Turbocharging gasoline engines is becoming ever more important since it is the only way to achieve the downsizing of engines that is essential to the reduction of fuel consumption," Peter Gutzmer, Continental's head of the engine systems in the company's powertrain division, said in a statement.
Automakers are under pressure to meet tougher emissions rules that start to take effect in Europe in 2012.
The partners aim to produce 2 million turbochargers a year by 2014.
Continental-Schaeffler rival Robert Bosch GmbH also has formed a turbocharger partnership. Bosch, which is the world's largest supplier, is working with Germany's Mahle GmbH on a turbo that the partners plan to start making in 2011.
The new entries will challenge Honeywell Turbo Technologies, the world leader in the field with a market share of more than 50 percent, and No. 2 maker BorgWarner Turbo & Emissions Systems.
More output, less money
Competition in the field is getting fierce because demand for the component is expected to rise ahead of the new emissions rule due in two years.
Roland Berger Strategy Consultants estimated that combining turbochargers with downsized engines will reduce CO2 emissions by up to 15 percent.
Due to this significant reduction, the consultancy has forecast that global turbocharger unit sales will double to 30.4 million 2015 from an estimated 15.1 million in this year.
However, Roland Berger estimates a less-impressive financial gain for suppliers – a boost in sales to 8 billion euros by 2020 from 6 billion euro.
This will be driven by the addition of more competitors in the field, the increased demand for the part and the need to create low-cost turbo to meet anticipated sales in low-cost emerging markets.